Richard Mason is singled out by respondents as a go-to in the US market for large and complex bankruptcies and restructurings.
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The ability to assume or reject executory contracts is one of the primary tools used by debtors in a Chapter 11 reorganization. Where a debtor has a contract with a third party that is “executory”—meaning that ongoing performance obligations remain for both the debtor and the contract counterparty on the date of the bankruptcy filing—the debtor can choose to either assume or reject the contract under 11 USC § 365.
At stake in a recent decision by the First Circuit was this: when a bankruptcy matter is before a federal district court based on non-core, “related to” jurisdiction, should the court apply the Federal Rules of Bankruptcy Procedure or the Federal Rules of Civil Procedure? The First Circuit ruled that the former apply, and in so doing joined three other circuits that have also considered this issue. Roy v. Canadian Pac. Ry. Co.
On May 3, 2021, Judge Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas held that indenture trustees must satisfy the “substantial contribution” standard to obtain administrative expense status for their fees and expenses incurred in a chapter 11 case. In his ruling, Judge Isgur expressly rejected the indenture trustee’s argument that it could obtain administrative expense status upon a showing that its fees and expenses were an actual, necessary cost of preserving the debtor’s estate.
Executive Summary
Albert Togut ranks highly among peers thanks to his significant experience handling high-profile restructuring and bankruptcy proceedings.
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"`Staggering' legal fees in Boy Scouts Bankruptcy Case." So read the title of an article in The New York Times on May 11, 2021. According to the reporter, a "lawyer negotiating a resolution to the multi-billion dollar bankruptcy filed by the Boy Scouts of America billed $267,435 in a single month. Another charged $1,725 for each hour of work. New lawyers fresh out of law school have been billing at an hourly rate of more than $600." The bankruptcy judge presiding over the case has called the fee totals "staggering," said the reporter.
On June 9, 2021, East Greenwich, R.I.-based jewelry company Alex and Ani, LLC filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware along with several affiliates. The lowest filed case number is 21-10917 (A and A Shareholding, Co., LLC). The company estimates $100 million to $500 million in both assets and liabilities.
Breaking with the Third Circuit and the Fifth Circuit, on June 28, 2011, the Seventh Circuit held that a debtor's plan of reorganization that provides for the sale of the debtor's assets free and clear of an existing security interest may only be confirmed over the objection of its secured creditor if the plan's sale procedure permits the secured creditor to credit bid its secured debt for the assets being sold. River Road Hotel Partners, LLC v. Amalgamated Bank, -- F.3d --, Nos. 10-3597 & 10-3598 (7th Cir. June 28, 2011).
On June 14, 2011, the Pension Benefit Guaranty Corporation (PBGC) published its final rule on the termination of an underfunded pension plan when the sponsor is in bankruptcy. The final rule is substantially the same as the proposed rule published in 2008. The Pension Protection Act of 2006 (PPA) amended the rules for a single-employer pension plan termination when the contributing sponsor is in bankruptcy.