On March 20, Florida Governor Rick Scott signed Senate Bill 220 into law. The bill is designed to limit the ability of defendants in foreclosure proceedings to keep contesting the foreclosure after agreeing, in bankruptcy, to surrender the property to their lenders.

What Happened: The Third Circuit Court of Appeals joined five other circuits in holding that the unforeseen business circumstances exception excused WARN notice where an event outside the employer's control that would trigger layoffs was possible but not probable to occur.

The Larger Landscape: While the Fifth, Sixth, Seventh, Eighth, and Tenth Circuits have also adopted a probability standard for determining when the unforeseen business circumstances exception applies, the other circuits have not yet ruled on the issue.

On August 4, 2017, the Third Circuit Court of Appeals issued its ruling in Varela v. AE Liquidation, Inc. (In re AE Liquidation, Inc.), 2017 U.S. App. LEXIS 14359 (3d Cir.

Delaware’s Bankruptcy Court has recently issued two insightful opinions that impact a creditor’s ability to establish the “receipt” element of a valuable 503(b)(9) administrative expense priority claim.

The Sixth Circuit Court of Appeals recently took up the controversial issue of whether a liquidating trustee’s lawsuit, alleging breach of fiduciary duty against a corporate debtor’s officers, falls within the “insured-versus-insured” exclusion of the debtor’s liability policy. See, Indian Harbor Insurance Company v. Clifford Zucker in his capacity as Liquidating Trustee for the Liquidating Trust of Capitol Bancorp Ltd. and Financial Commerce Corporation, 2017 FED. App. Nos.

We have previously posted about a couple major milestones for Green Field Energy – here Green Field Energy Files for Bankruptcy Protection in Delaware and here: Green Field Energy Services – Preference A

In bankruptcy cases under chapter 11, debtors sometimes opt for a "structured dismissal" when a consensual plan of reorganization or liquidation cannot be reached or conversion to chapter 7 would be too costly. In Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973, 2017 BL 89680 (U.S. Mar. 27, 2017), the U.S. Supreme Court held that the Bankruptcy Code does not allow bankruptcy courts to approve distributions in structured dismissals which violate the Bankruptcy Code's ordinary priority rules.

“… [A]ny sale of [a foreign] debtor[’s] property [in the U.S.] outside of the ordinary course of business can be approved by the bankruptcy court only after notice, hearing, and a finding of good business reasons to permit the sale,” held the U.S. Court of Appeals for the Second Circuit on May 22, 2017. In re Fairfield Sentry Ltd. (“Sentry II”), 2017 U.S. App. LEXIS 8860, at *11 (2d Cir. May 22, 2017).

Recent Developments in Acquisition Finance

In a highly anticipated decision, the U.S. Supreme Court ruled on March 22, 2017, in Czyzewski v. Jevic Holding Corp., No. 15-649, 2017 BL 89680 (U.S. Mar. 22, 2017), that, without the consent of affected creditors, bankruptcy courts may not approve "structured dismissals" providing for distributions which "deviate from the basic priority rules that apply under the primary mechanisms the [Bankruptcy] Code establishes for final distributions of estate value in business bankruptcies."