A majority of today’s large Chapter 11 cases are structured as quick Section 363 sales of all the debtor’s assets followed by confirmation of a plan of liquidation, dismissal of the case, or a conversion to a Chapter 7. The purchaser in the sale is often one of the debtor’s prepetition secured or undersecured lenders, which may also act as the debtor-inpossession (DIP) lender and purchase the debtor’s assets through a credit bid, with no cash consideration.

In prior posts, we discussed the perplexing issue of how and whether a trademark licensee is protected when the trademark owner/licensor files a bankruptcy petition and moves to reject the trademark license in accordance with section 365 of the Bankruptcy Code.

We have discussed plan releases in prior posts. Oftentimes, disputes involving plan releases revolve around whether, and in what contexts, third-party releases in plans are appropriate. Recently, the Third Circuit Court of Appeals addressed the relatively unique question of whether releases in a confirmed plan are binding upon post-confirmation purchasers of the debtor’s stock.

Late last month, the Supreme Court granted a petition for certiorari review of the Fourth Circuit Court of Appeals’ decision in PEM Entities LLC v. Eric M. Levin & Howard Shareff. At issue in PEM Entities is whether a debt claim held by existing equity investors should be recharacterized as equity. The Supreme Court is now poised to resolve a split among the federal circuits concerning whether federal or state law should govern debt recharacterization claims.

Earlier this month, the United States Supreme Court agreed to review a Seventh Circuit decision regarding the scope of the so-called “safe harbor” from avoidable transfers provided in Section 546(e) of the Bankruptcy Code. Many in the U.S. bankruptcy industry expect that the Supreme Court granted certiorari to hear Merit Management Group, LP v. FTI Consulting, Inc., Case No. 16-784, in order to resolve a long-running split among the 2nd, 3rd, 6th, 8th, and 10th Circuits, on the one hand, and the 7th and 11th Circuits on the other.

This Monday, the U.S. Supreme Court rejected General Motors’ petition for a writ of certiorari, which GM filed in an attempt to overturn a ruling by the Second Circuit Court of Appeals related to the sale of substantially all of GM’s assets in bankruptcy. When we last visited the case in a prior blog post, GM’s petition to the Supreme Court was still pending.

Yesterday, the Supreme Court issued is highly awaited ruling in Czyzewski et al. v. Jevic Holding Corp. et al. The Jevic case presented the question whether bankruptcy courts may approve non-consensual structured dismissals that vary the distribution scheme established by the Bankruptcy Code.

On June 6, 2022, the U.S. Supreme Court issued its opinion in Siegel v. Fitzgerald, in which the Court held that the Bankruptcy Judgeship Act of 2017, Pub. L. 115-72, Div. B, 131 Stat. 1229 (the “2017 Act”) was unconstitutional.

Although debtors who file for Chapter 11 bankruptcy generally cannot pay prepetition debts until a plan which complies with the “absolute priority rule” is confirmed, there are a number of now well-established exceptions to this rule.

We have written before about the virtual dead end faced by marijuana companies who try to seek protection in the bankruptcy courts. Almost uniformly, bankruptcy courts have shut their doors on marijuana companies, including their landlords and suppliers.