Before the US Supreme Court’s landmark decision in Purdue Pharma,1 it had become common practice for Chapter 11 debtors to include a consensual or nonconsensual non-debtor third-party release in their plans of reorganization.
The University of Georgia, through the University’s athletic association (UGAA), is seeking damages totaling $390,000 against a former football player, Damon Wilson II, after he elected to transfer to Missouri following the 2024 season. The demand stems from a clause in Wilson’s NIL contract that required him to forfeit the balance of his agreement if he transferred to another school.
An assignment for benefit of creditors (an “ABC”) under the common law is an out-of-court tool for liquidating a business debtor’s assets in an efficient and credible manner.
Such a common law tool has been used, effectively and frequently, for many years in such states as Illinois and California.
Despite the out-of-court nature of an ABC under the common law, courts can still be enlisted to resolve discrete issues that may arise. Here is an example of a court’s involvement, within an ABC under the common law, to resolve an issue of compensation for the ABC assignee:
Red Lobster Seafood Co., the beloved full-service dining seafood specialty restaurant operator, is staging a comeback just one year after emerging from Chapter 11 bankruptcy. The company has taken steps to restructure its operations and improve its financial performance. With new leadership and a bold turnaround plan, the company’s future looks promising again.
Headquartered in Orlando, Florida, Red Lobster has over 500 locations in the United States and Canada. The brand has become associated with fresh seafood, welcoming guest service, and affordable prices.
Here’s a curious thing:
- an advisory opinion from a U.S. Circuit Court of Appeals on an issue for which there is no controversy and that is mostly academic.
That’s exactly what we have in In re Whittaker Clark & Daniels, Inc., Case Nos. 24-2210 & 24-2211 (3rd Cir., decided September 10, 2025)(see first concurring opinion).##
No Controversy
The hemp industry is facing a rapidly shifting regulatory landscape that could significantly alter the financial and legal viability of many businesses. In the recent episode of TaxTalk x Cannabis Quick Hits, we break down the looming regulatory overhaul, its tax and bankruptcy implications, and the restructuring options available to hemp and cannabis companies navigating financial distress.
A Major Regulatory Shift for Hemp