The COVID-19 pandemic hit the bottom line of many businesses. Among the hardest hit industries has been the travel industry and, in particular, airlines and aviation companies. Many airlines are still struggling to generate new ticket sales as compared to pre-pandemic levels and average fares remain depressed.1 One industry source predicts that passenger numbers will not return to 2019 levels prior to 2024.2 Compounding this are increased costs of fuel (up 35% so far this year) and other expenses.3
Ongoing economic turmoil makes now the right time to discuss U.S. bankruptcies and preference actions.
The COVID-19 pandemic hit the bottom line of many businesses. Among the hardest hit industries has been the travel industry and, in particular, airlines and aviation companies. Many airlines are still struggling to generate new ticket sales as compared to pre-pandemic levels and average fares remain depressed.1 One industry source predicts that passenger numbers will not return to 2019 levels prior to 2024.2 Compounding this are increased costs of fuel (up 35% so far this year) and other expenses.3
Justice Stephen G. Breyer is set to retire from the U.S. Supreme Court in a few months.
But he’s not easing into retirement.
Instead, he’s out there swinging—fighting for his beliefs: trying to instruct / persuade current and future jurists on how the law should be applied.
Justice Breyer’s latest punch is a lone-dissent, against an eight-Justice majority, dated March 31, 2022. In this dissent, Justice Breyer explains his doctrine of statutory interpretation.
The Breyer Doctrine
Justice Breyer’s doctrine goes like this:
“Good-faith purchasers enjoy strong protection under [Bankruptcy Code (“Code”)] § 363(m),” but the silent asset buyer (“B”) with “actual and constructive knowledge of a competing interest” lacks “good faith,” held the U.S. Court of Appeals for the Seventh Circuit on April 4, 2022. Archer-Daniels-Midland Co. (“ADM”) v. Country Visions Cooperative, 2022 WL 998984 (7th Cir. Apr. 4, 2022).
What do the Dodgers, American Apparel, Rubio’s Fish Tacos, California Pizza Kitchen, MGM Studios, and Pacific Sunwear have in common? Each is an iconic Southern California brand. But that’s not all they have in common. According to statistics, over the last 20 years 143 California based companies having over $32 billion in assets, and over 211,000 employees have filed bankruptcy in Delaware alone. These companies are members of a growing list of California companies that strategically elected to file for bankruptcy outside of California.
Does a rotten tree produce good fruit?
That’s the bankruptcy issue before the U.S. Supreme Court in Siegel v. Fitzgerald, where the Question is this:
“Whether the Bankruptcy Judgeship Act violates the uniformity requirement of the Bankruptcy Clause by increasing quarterly fees solely in U.S. Trustee districts.”
Note:
The Bankruptcy Protector
Imagine this: you sell a product to a company on credit at 8% interest until you are paid, and the company files for bankruptcy before repayment. Or maybe you are a hard money lender that made an unsecured loan at 18% to a company to bridge through hard times, and the company files for bankruptcy. Or maybe you are a secured creditor with a 5% loan on real estate, and after the borrower files for bankruptcy, you discover there is a defect in your mortgage and your lien can be stripped.
The Fifth Circuit recently dismissed an appeal of a confirmation order as equitably moot. The decision was based on three key factors: the appellant hadn’t obtained a stay pending appeal, the plan had been substantially consummated, and practical relief couldn’t be fashioned if the plan was unwound.Talarico v. Ultra Petro. Corp. (In re Ultra Petro. Corp.), Case No. 21-20049, 2022 U.S. App. LEXIS 8941 (5th Cir. Apr. 1, 2022).
What role might dispute funding play in a complex cross-border dispute involving multiple jurisdictions in Latin America?