Traditional DIP Order Carve Outs Do Not Cap the Administrative Claims of Committee Professionals
In its recent decision Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973 (2017), the United States Supreme Court held that a bankruptcy court may not approve a structured dismissal of a chapter 11 case that provides for distributions that fail to follow the standard priority rules, unless the affected creditors consent to such treatment.
The United States Bankruptcy Court for the District of Delaware recently issued an opinion that could mean that directors and officers of insolvent entities face liability for damages caused by the failure to timely file for bankruptcy protection.
In a case of first impression, DLA Piper argued before the US Bankruptcy Court for the District of Delaware that a consent provision in a Delaware LLC operating agreement effectively granting a creditor a veto right over a debtor’s decision to file for bankruptcy was void because it was contrary to federal public policy.
The US Bankruptcy Court for the Southern District of New York has issued a ruling in a chapter 11 case that could have a significant impact on future restructurings in the oil and gas industry.
On March 8, 2016, in the case of Sabine Oil and Gas Corp., Judge Shelley Chapman ruled that Sabine could reject certain pipeline and gas gathering agreements with two midstream gathering pipeline companies.
An opinion issued in connection with the bankruptcy cases of Lyondell Chemical Company and its affiliates may have significant implications for shareholders who receive payments in connection with a leveraged buyout when the underlying company subsequently files for bankruptcy.
A bankruptcy court’s preliminary injunction was “not a final and immediately appealable order,” held the U.S. District Court for the District of Delaware on Dec. 10, 2019. In re Alcor Energy, LLC, 2019 WL 6716420, 4 (D. Del. Dec. 10, 2019). The court declined to “exercise [its] discretion” under 28 U.S.C. §158(a)(3) to hear the interlocutory appeal. Id., citing 16 Wright & Miller, Federal Practice and Procedure, §3926.1 (3d ed. 2017) (“There is no provision for appeal as of right from an injunction order of a bankruptcy judge to the district court.”).
A Chapter 11 debtor “cannot nullify a preexisting obligation in a loan agreement to pay post-default interest solely by proposing a cure,” held a split panel of the U.S. Court of Appeals for the Ninth Circuit on Nov. 4, 2016. In re New Investments Inc., 2016 WL 6543520, *3 (9th Cir. Nov. 4, 2016) (2-1).
The U.S. Court of Appeals for the Eleventh Circuit, on Aug. 15, 2014, ordered a bankruptcy court to vacate a final asset sale order almost four years after its entry because of insider misconduct. In re Global Energies, LLC, 2014 WL 3974577 (11th Cir. Aug. 15, 2014).
The U.S. Court of Appeals for the Seventh Circuit, on Feb. 14, 2013, held that an insider of a Chapter 11 partnership debtor cannot avoid the “competition rule” in a new-value reorganization plan. The debtor’s equity owner arranged for his wife, also an “insider,” to contribute new value to obtain the equity of the reorganized debtor. In re Castleton Plaza, LP, — F.3d –––, 2013 WL 537269 at *1 (7th Cir., Feb. 14, 2013).