Equitable mootness is a judicially created doctrine often applied in appeals from orders of bankruptcy courts confirming chapter 11 plans of reorganization. In instances where granting relief on appeal would result in overturning the confirmation order and therefore unravelling a substantially consummated chapter 11 plan, appellate courts have, in certain circumstances, abstained from deciding appeals in reliance on equitable mootness.

On November 8, 2018, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) issued a decision dismissing an involuntary chapter 11 case filed against Taberna Preferred Funding IV, Ltd. (“Taberna”), a CDO, by holders of non-recourse notes (the “Petitioning Creditors”).

Intercreditor agreements--contracts that lay out the respective rights, obligations and priorities of different classes of creditors--play an increasingly important role in corporate finance in light of the continued prevalence of complex capital structures involving various levels of debt. When a company encounters financial difficulties, intercreditor agreements become all the more important, as competing classes of creditors seek to maximize their share of the company's limited assets.

A bankruptcy court properly dismissed a creditor’s involuntary bankruptcy petition “for cause” when it “would serve none of the Bankruptcy Code’s goals or purposes . . . and [when] the sole [petitioning] creditor is not substantially prejudiced by remedies available under state law,” held the U.S. Court of Appeals for the Second Circuit on Aug. 14, 2018. In re Murray, 2018 WL 3848316, *7 (2d Cir. Aug. 14, 2018). In its view, the bankruptcy court “declined to serve as a ‘rented battle field’ or ‘collection agency’” for a single creditor. Id., at *7.

The Bottom Line

For a vast number of professionals, email has become the preferred method for communicating and conducting business. However, many of those people who would choose to fire off a quick email over picking up a phone may not be aware that a casual email can transform into a binding, enforceable contract. Such was the case for the parties in Shinhan Bank v. Lehman Brothers Holdings Inc. (In re Lehman Brothers Holdings Inc.), Case No. 17-2700, 2018 WL 3469004 (2d Cir.

On June 27, 2018, the Second Circuit denied Nordheim Eagle Ford Gathering, LLC’s petition for a panel rehearing and request that the court certify issues of Texas property law to the Texas Supreme Court. The denial leaves in place the Second Circuit’s May Summary Order affirming the widely publicized decisions of the bankruptcy and district courts below which concluded that the midstream contracts could be rejected because they did not create covenants running with the land under Texas law.

Summary of Key Takeaways

Recently, in Anderson v.

Even if a U.S. court has jurisdiction over a lawsuit involving foreign litigants, the court may conclude that a foreign court is better suited to adjudicate the dispute because either: (i) it would be more convenient, fair, or efficient for the foreign court to do so (a doctrine referred to as "forum non conveniens"); or (ii) the U.S. court concludes that it should defer to the foreign court as a matter of international comity. Both of these doctrines were addressed in a ruling recently handed down by the U.S.

On May 25, 2018, the United States Court of Appeals for the Second Circuit (the “Court”) affirmed a district court’s affirmance of a bankruptcy court’s decision in In re Sabine Oil & Gas Corp. that permitted a debtor to reject a midstream gathering agreement as an “executory contract.”1 The Court’s decision, which is the first Court of Appeals to address the rejection of a midstream gathering agreement, firmly establishes a debtor’s right to do so under certain circumstances.

BACKGROUND