Section 363 of the Bankruptcy Code provides debtors an efficient and flexible mechanism to dispose of substantially all estate assets outside of the confines of the Bankruptcy Code’s provisions concerning plan confirmation.  The Third Circuit’s recent decision in 

How many ages hence / Shall this our lofty scene be acted o’er, / In states unborn, and accents yet unknown!
– William Shakespeare, Julius Caesar

“Dream the impossible dream; eat the impossible sundae…”  So the song goes – or rather, went – at The Show Place Ice Cream Parlour in Beach Haven, New Jersey.  Sadly, The Show Place and the adjoining Surflight Theatre have closed their doors and will be liquidating their assets in chapter 7.  The authors have fond memories of shows at the Surflight and family outings to The Show Place, and we are now in the unenviable position of wishing the institution a melancholy happy trails.  So for this installment of Bankruptcy Beach Reading, we take you to Long Beach Island, New

Benjamin Franklin is quoted as having said “in this world nothing can be said to be certain, except death and taxes.”  No offense to Mr. Franklin, but we had always thought that there was at least one other certainty in this world—in a bankruptcy case, creditors get paid pursuant to the priority scheme under section 507(a) of the Bankruptcy Code.  It turns out, however, that Mr.

Overview

Bankruptcy courts often dismiss appeals of chapter 11 plans when granting the relief requested in the appeal would undermine the finality and reliability of the corresponding plans, a doctrine known as Equitable Mootness. Over the past several years, certain circuits criticized the doctrine for its lack of statutory basis and effect of avoiding review on the merits.¹

In the majority of surveyed deals (55%), Sponsor-backed IPO companies availed themselves of at least some “controlled company” exemptions available under applicable listing requirements, which, among other things, exempt such companies from certain board and committee director independence requirements (other than with respect to the audit committee).

A recent decision from the United States District Court for the Southern District of New York, In re Tribune Co. Fraudulent Conveyance Litigation, Case No. 12-2652, 2019 WL 1771786 (S.D.N.Y. April 23, 2019) (Cote, J.), has re-examined application of the “securities safe harbor” under section 546(e) of the Bankruptcy Code, 11 U.S.C. §§ 101–1532, to the transferees of “financial institutions” in so-called “conduit transactions,” following the United States Supreme Court’s 2018 decision in Merit Management Group, LP v. FTI Consulting, Inc., 138 S. Ct. 883 (2018).

The recent success in Claire’s Stores’ $2.1 billion restructuring reinforces the importance of a proactive approach to corporate governance for closely held or sponsor-owned portfolio companies.

In a recent decision, the Fifth Circuit narrowly held that federal law does not prevent a bona fide shareholder from exercising its voting right in the company’s charter to prevent the filing by the company of a bankruptcy petition merely because it is also an unsecured creditor. In re Franchise Servs. of N. Am., Inc., 891 F.3d 198, 203 (5th Cir. 2018).