In a 2021 chapter 15 decision, In re Bankruptcy Estate of Norske Skogindustrier ASA,1 the United States Bankruptcy Court for the Southern District of New York held that foreign law avoidance claims that are sufficiently analogous to claims under section 548(a)(1)(A)2 of the Bankruptcy Code—but not identical—may fall within the intentional fraud exception to the safe harbor provisions of section 546(e)3 of the Bankruptcy Code (the “Safe Harbor”).
Question: What gets an attorney’s fee application allowed—or rejected—in bankruptcy?
Short answer: The services, (i) must be “necessary,” and (ii) must require legal expertise.
Two Recent Opinions
Two recent opinions address this question:
“Subchapter V is supposed to be a fast process toward plan confirmation, but I don’t see that happening!”
–Comment of a Bankruptcy Judge (as I recall the comment)
It’s true: (i) Subchapter V is supposed to go quickly, but (ii) it often doesn’t.
Here’s why it doesn’t: debtor attorneys often fail to push their cases forward.
Illustration
A bankruptcy court opinion, in a Subchapter V case, illustrates the problem.
On March 14, 2022, the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) revisited the issue of the rejection of filed-rate contracts in bankruptcy where such contracts are governed by the Federal Energy Regulatory Commission (“FERC”). The ruling marks the first time the Fifth Circuit has addressed this issue since its 2004 decision in In re Mirant Corp.1 In Federal Energy Regulatory Commission v.
Last week this author delved into what has become known as the “Texas Two-Step,” the arguments for and against its permissibility and the broader implications for the bankruptcy system.
In its January 14, 2022 decision in In re Wolfson, the United States Bankruptcy Court for the District of Delaware discharged Chapter 7 debtor Ryan K.
Overview
Foreign companies seeking to protect their overseas assets from their creditors have often turned to the United States for immediate relief under Chapter 11 of the Bankruptcy Code. Establishing jurisdiction in the US for purposes of a bankruptcy filing has proved easy – the establishment of a nominal professional fees retainer with a local law firm on the eve of a bankruptcy filing will suffice.
In the Summer 2021 edition of the Restructuring Report, I wrote about legislative efforts to reform the Bankruptcy Code to place limits on the use of third party releases in bankruptcy plans of reorganization.
Court watchers have kept a close eye on the In re: Purdue Pharma LP chapter 11 bankruptcy case, and for good reason. It is one of the largest cases to test a question that has divided the Circuit Courts of Appeals: can a debtor in its chapter 11 plan include releases from liability for non-debtor third parties over the objection of creditors? Although the debate over the answer has been stewing for some time now, a December 2021 decision from the Southern District of New York may finally cause the pot to boil over.