Insights

Time Has Come for Special Masters to Streamline Bankruptcy Cases

Use It or Lose It: US Supreme Court Unanimously Holds in MOAC Mall Holdings LLC That 363(m) Protections Can Be Waived

The U.S. Supreme Court recently issued its latest bankruptcy opinion in MOAC Mall Holdings LLC v. Transform Holdco LLC , holding that the Bankruptcy Code’s rule against invalidating 363 sales after appeal is not an iron-clad jurisdictional bar, but rather...

Lightning Round: LTL Management Files “Chapter 22” Case Immediately Following Bankruptcy Court’s Dismissal of its Prior Bankruptcy

Just hours after the United States Bankruptcy Court for the District of New Jersey entered an order dismissing the Chapter 11 Case of Johnson & Johnson subsidiary, LTL Management, as a bad faith filing, LTL filed for Chapter 11 protection...

546(e)’s Not-So-Safe Harbor: Second Influential Judge Echoes Concerns that Broad Exemption Shelters Pirates

Delaware Judge Brendan Shannon has joined calls for reforming Section 546(e) of the bankruptcy code, echoing concerns that the section’s safe harbor from fraudulent transfer liability has allowed investors to “loot privately held companies to the detriment of their non-insider...

Subrogation Shutdown: Texas Southern District Court Upholds Exercise of Bankruptcy Code Provisions to Strip Subrogation Rights Against Asset Purchaser

In a decision that once again evidences the Fifth Circuit’s strong stance on the finality of asset sales in bankruptcy absent a stay of the applicable order, on March 8, 2023 the United States District Court for the Southern District...

Texas "Two-Step" Forward, Three Steps Back for Mass Tort Debtors in the Third Circuit After LTL

In a decision that may provide much-needed boundaries around the permissibility of debtors created from “out-of-the-box” prepetition corporate transactions, on January 30, 2023, the United States Court of Appeals for the Third Circuit issued a unanimous opinion dismissing Johnson &...

Mallinckrodt Ruling Holds Creditor Lessons for IP Sellers

In late December, the U.S. District Court for the District of Delaware issued an opinion in In re: Mallinckrodt PLC affirming the Mallinckrodt[1] bankruptcy court's November 2021 decision that the debtor could discharge certain post-petition, post-confirmation royalty obligations for the...

Fifth Circuit Rules Just Energy Bankruptcy Court Erred in Exercising Jurisdiction to Redetermine ERCOT Pricing During Winter Storm Uri

In a January 5, 2023 opinion from the United States Court of Appeals for the Fifth Circuit, the panel held the Just Energy bankruptcy court erred in exercising jurisdiction over the debtor’s suit to recover Winter Storm Uri payments made...

My Crypto's Gone: Cryptocurrency in Earn Accounts Belong to Celsius Not Customers

Cryptocurrency in Celsius’ Earn Accounts belongs to the bankruptcy estate, and not to the depositors who placed it there, according to a January 4 memorandum opinion from Judge Martin Glenn of the U.S. Bankruptcy Court in the Southern District of...

A Royal Pain: Contingent Royalties Held to Be Dischargeable in Mallinckrodt

In late December 2022, the United States District Court for the District of Delaware issued an opinion affirming the Mallinckrodt 1 bankruptcy court’s November 2021 decision that the debtor could discharge certain post-petition, post-confirmation royalty obligations for the sale of...

"Fatal Means Fatal": 5th Circuit's Broad Read of 363(m) Continues to Moot Section 363 Appeals after the Sale

Recent rulings out of the United States Court of Appeals for the Fifth Circuit and its lower bankruptcy courts have emphasized the circuit’s broad interpretation of section 363(m) of the Bankruptcy Code, which protects bankruptcy sales from being overturned on...

Parting Advice: Judge Drain Rules That Dividends Paid From the Proceeds of Safe-Harbored Transactions Are Not Safe-Harbored in In re Tops Holding II Corp.

In his final opinion, Judge Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York held that dividends paid from proceeds of safe-harbored transactions under section 546(e) of the Bankruptcy Code are not safe-harbored...

Your Word Is Your Bond: Fifth Circuit Court of Appeals Determines Surety Bonds Are Not Executory Contracts Even Through Multiparty Approach in In re Falcon V, LLC

Following an August 11, 2022 opinion from the Court of Appeals for the Fifth Circuit, certain irrevocable surety bonds will not be considered executory contracts in bankruptcy, even when a court applies a functional multiparty approach to the traditional Countryman...

Crypto Assets in the Voyager Bankruptcy: Can Customers Recover?

The crypto winter has overcast the summer for many Voyager customers. Upon the commencement of Voyager’s chapter 11 filing in July, customer accounts were frozen. Unable to trade their own crypto assets, some frustrated customers rushed to consult with legal...

Better Late Than Never: Delaware Bankruptcy Court Determines That 546(e) Avoidance Safe Harbors Are Available to Defendants That Only Qualify as Financial Participants Several Years After the Subject Transaction in In re Samson Resources Corp.

Following an August 4, 2022 memorandum opinion from Judge Brendan L. Shannon of the United States Bankruptcy Court for the District of Delaware, a party to a safe harbored contract can qualify as a “financial participant” under section 546(e) of...