The U.S. Bankruptcy Court for the Southern District of Texas awarded on Oct.

It’s often hard to tell whether the conflict between environmental cleanup laws and bankruptcy statutes is a bug or a feature. The two seem irreconcilable when the intent of environmental laws to protect public health and safety by imposing cleanup costs on the polluter runs headlong into the Bankruptcy Code’s design to give a debtor a fresh start. Frequently, the latter prevails.

When stakeholders in a bankruptcy disagree as to how assets should be distributed, the result may be intercreditor litigation that is both expensive and time-consuming. Such litigation can seem antithetical to the purpose of the Bankruptcy Code, which encourages stakeholders to approve a consensual restructuring plan. Nevertheless, many creditors conclude they have no other choice but to litigate.

The Bottom Line

 In a decision published October 19, 2020, Judge Frank J. Bailey of the U.S. Bankruptcy Court for the District of Massachusetts found that an Indian tribe was not subject to the Bankruptcy Code’s automatic stay.

It is common for E&P companies in chapter 11 to seek to reject burdensome midstream contracts under Bankruptcy Code § 365. Rejection has not been permitted by bankruptcy courts where such agreements create enforceable covenants running with the land (“CRWL”) because a CRWL is a real property interest of the midstream gatherer, not just a contract right. Accordingly, before a debtor can seek to reject midstream agreements, the bankruptcy court must first determine whether an enforceable CRWL exists.

In Michigan, the general rule is that only a real party in interest may initiate a lawsuit. MCR 2.201(B). Although it is usually easy to identify the proper party (or parties), it becomes harder if a would-be plaintiff files for bankruptcy protection before initiating the lawsuit. A recent decision by the Michigan Court of Appeals illustrates the difficulty, and highlights how important it is to pay attention to the debtor’s bankruptcy schedules.

This note considers how the recent changes to UK insolvency law introduced by the Corporate Insolvency and Governance Act 2020 ("CIGA") might affect those involved in the sale and purchase of commodities. In particular, it looks at the impact of Section 14 of CIGA on contracts for the supply of goods or services, and on the typical rights and remedies of the seller / supplier under such contracts.

As a result of the economic fallout of COVID-19, more bankruptcies are on the horizon, especially as government aid programs expire and involuntary or voluntary moratoriums on creditor action come to an end. [1] Creditors should be aware and prepared to avoid potential claims for alleged violation of the discharge injunction under the Bankruptcy Code and related orders.

October Bankruptcy Developments