Recently, the bankruptcy court presiding over the Energy Futures chapter 11 case issued an opinion analyzing the interplay between an intercreditor agreement’s distribution waterfall and payments to be made under the debtors’ multi-step reorganization plan. The court rejected a secured creditor’s argument that the intercreditor agreement’s distribution waterfall was triggered by one step of that reorganization.
In a unanimous decision affirming the Sixth Circuit, the Supreme Court held that creditors have 14 days to appeal a bankruptcy court’s denial of relief from the automatic stay. In one of the term’s first decisions, Justice Ginsburg’s opinion in Ritzen Group, Inc. v.
A recent decision by the United States Court of Appeals for the First Circuit provides additional guidance with respect to jurisdictional disputes that bankruptcy professionals often see in practice. In particular, the Gupta v. Quincy Med. Ctr., 2017 U.S. App. LEXIS 9814 (1st Cir. June 2, 2017) case analyzed whether a bankruptcy court had jurisdiction to adjudicate a post-sale dispute among a purchaser of estate assets and former employees of the debtors.
Courts struggled this year to find a balance between state-licensed cannabis activity and the federal right to seek bankruptcy protection under the Bankruptcy Code. During 2019, we had the first circuit-level opinion in the bankruptcy/cannabis space that appeared to open the door to bankruptcy courts, albeit slightly. We also had lower court opinions slamming that door shut. Below, we look at a few of the most important decisions issued throughout 2019 and analyze the current state of the law.
The Ninth Circuit Court of Appeals’ Garvin Decision
A recent decision by the Sixth Circuit Court of Appeals may have muddied the question of the impact of collateral rent assignments on a debtor’s ability to re-organize under chapter 11.
On June 26, 2019, the European Parliament and the Council of the European Union published a new EU Restructuring Directive on preventive restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (“Directive”).
This is an extraordinary achievement given the existing differences in restructuring regimes across EU Member States.
On 6 April 2017, new Insolvency Rules came into force which will affect creditors’ rights in most insolvency procedures. More information on the insolvency changes generally are available in this blog post.
In another loss for the cannabis industry, a district court recently affirmed the dismissal of chapter 11 petitions filed by companies that sold product used by both state-licensed marijuana growers and non-marijuana growers. The district court’s decision in Way to Grow, Inc. demonstrates that the door that was opened by the Ninth Circuit in Garvin v. Cook Invs.
It is commonly understood that, upon commencement of a bankruptcy case, section 362 of the Bankruptcy Code operates as an automatic statutory injunction against a wide variety of creditor actions and activities.
On September 11, 2019, the Delaware district court affirmed the bankruptcy court’s decision to expunge a proof of claim filed by a claims trader in the Woodbridge Group of Companies, LLC bankruptcy case.