In a highly anticipated bankruptcy opinion, the United States Supreme Court, in Czyzewski v. Jevic Holding Corp., held that courts may not approve structured dismissals providing for distributions that deviate from the priority rules prescribed in the Bankruptcy Code, absent consent of the affected creditors.
We at the Bankruptcy Cave are not very surprised by the ruling yesterday in Czyzewski v. Jevic Holding Corp. The Supreme Court in Jevic reviewed a Bankruptcy Court’s decision to approve a settlement (with a distribution of proceeds that contravened the Bankruptcy Code’s priority scheme) in conjunction with dismissing the bankruptcy case of the Chapter 11 debtor Jevic Holding Corp.
The U.S. Supreme Court held today in a 6 to 2 decision that “structured dismissals” resolving Chapter 11 bankruptcy proceedings cannot deviate from the Bankruptcy Code’s priority scheme without the consent of the affected parties – which means that businesses must ensure workers receive their unpaid wages as part of any such resolution. Specifically, the Court rejected a structured dismissal that left a group of WARN Act plaintiffs without any compensation, telling employers, essentially, that they must squeeze blood from a stone to compensate their workers.
On February 27, 2017, the United States Court of Appeals for the Tenth Circuit joined a minority approach followed by District of Columbia Circuit: failing to turn over property after demand is not a violation of the automatic stay imposed by 11 U.S.C. § 362. WD Equipment v. Cowen (In re Cowen), No. 15-1413, — F.3d —-, 2017 WL 745596 (10th Cir. Feb. 27, 2017), opinion here.
In a recent opinion, the United States Court of Appeals for the Ninth Circuit expanded the protections afforded to individual members of an official creditors’ committee against certain lawsuits. Specifically, in In re Yellowstone Mountain Club, LLC, 841 F.3d 1090 (9th Cir.
Section 523(a)(2) of the Bankruptcy Code is clear that a debtor can discharge a debt for money obtained by a false statement respecting the debtor's financial condition unless that statement is in writing. What has not been clear is whether a debtor's false oral statement regarding a single asset is a "statement respecting the debtor's financial condition" that falls within the ambit of 523(a)(2)(A). If so, debts obtained by such a false oral statement would be dischargeable. If not, then creditors could seek to have such fraudulently obtained debts excepted from discharge.
We previously wrote about the U.S. Supreme Court’s decision to hear a group of truck drivers’ challenge to the dismissal of a chapter 11 bankruptcy case that was designed to avoid paying the drivers’ claims. Today, the U.S. Supreme Court issued its decision in Czyzewski v.
Czyzewski v. Jevic Holding Corp., No. 15-649 (2017)
Foreign financial institutions that trade dollar-denominated securities on the secondary market may not appreciate that they could be forced to defend an action arising from such a transaction in a U.S. court. That is what happened, however, to an Austrian bank that purchased a $10 million interest in a syndicated $1.5 billion term loan on the secondary market. In a recent decision, the bankruptcy court in Motors Liquidation Co. Avoidance Action Trust v. JPMorgan Chase Bank, N.A. (In re Motors Liquidation Co.), Adv. Pro. No. 09-00504 (MG), 2017 WL 632126 (Bankr. S.D.N.Y. Feb.