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Claims Agents Beware:  Business Arrangement With Claims-Trading Platform Raises Court’s Concern

Online claims-trading platform Xclaim Inc. came under scrutiny this past summer in the Madison Square Boys & Girls Club Inc. bankruptcy case pending in the United States Bankruptcy Court for the Southern District of New York.  Since at least 2019, Xclaim has executed agreements with at least five notice and claims agent firms to synchronize … Continue Reading

Equitable Mootness No Bar to “Slicing & Dicing” Exculpation Clause From Confirmation Order

While the Judge-made doctrine of equitable mootness continues to beguile and often stymie parties-in-interest seeking to appeal an order confirming a chapter 11 plan (as well as other orders which are on appeal prior to confirmation of a plan), appellants in the Fifth Circuit can continue to rest assured that the doctrine will be applied … Continue Reading

Fifth Circuit Says A Solvent Debtor Must Pay According To The Contract – No Doubt About It

The saga of the first Ultra Petroleum Corp. chapter 11 cases appears to have finally come to an end.  Numerous articles have been written on the tortured history of whether certain creditors of Ultra Petroleum are entitled to payment of their contractually mandated Make-Whole Amount and default rate of interest.  The creditors’ quest for allowance … Continue Reading

In re PWM Property Management: Creditors’ and Equity Holder’s Attempt to File and Solicit Competing Plan During Exclusivity Period Denied

What options does a creditor have when they are frustrated with how a debtor is conducting its chapter 11 bankruptcy case?  In In re PWM Property Management LLC, the Delaware bankruptcy court denied a motion by creditors and interest holders to file a proposed plan of reorganization as an exhibit to their opposition to the … Continue Reading

Sanctions Against Russia and Restrictions on Flow of Capital Lead to First Chapter 11 Filing in the United States and Will Likely Lead to More Filings

As the conflict in Ukraine enters its second month and the list of sanctions and restrictions imposed by the United States, the European Union and other countries increases to punish Russia, the effects of the sanctions will become more apparent and are expected to have profound and lasting effects on a large number of industries. … Continue Reading

Webinar Recording: The Conflict in Ukraine – Impact on Capitals, Markets and Boardrooms

On Tuesday, March 22, 2022, Squire Patton Boggs and the American Bankruptcy Institute hosted a webinar titled “The Conflict in Ukraine:  Impact on Capitals, Markets and Boardrooms.”  The webinar featured a distinguished panel of Squire Patton Boggs professionals, including former Speaker of the US House of Representatives John Boehner, Career Ambassador Frank Wisner, Ambassador Matthew … Continue Reading

The Bankruptcy Court’s Ruling is in: J&J’S Texas Two-Step Does Not Constitute A Bad Faith Filing

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.  The discussion focused on an ongoing trial on motions filed in the bankruptcy case of LTL Management, LLC (“LTL” or the “Debtor”), a Johnson & Johnson … Continue Reading

The “Texas Two-Step” Firestorm: This Is No Dance!

In recent weeks, a move dubbed the “Texas Two-Step” has leaped from coverage first in publications geared only for the professional restructuring community, then to the mainstream press, then to hearings before the United States Senate Judiciary Committee, and now to a full-blown trial ongoing in a New Jersey bankruptcy court.  For those not closely … Continue Reading

Limetree Bay: Messy Auction Process Generates Increased Recoveries

Can messy be good?  Sometimes the answer is yes.  The chapter 11 case filed by Limetree Bay Services, LLC and five of its affiliates (“Limetree Bay”) is one example of auction disorder actually bringing increased creditor recoveries. Bankruptcy professionals, financially distressed companies and acquirers of distressed assets can learn valuable lessons from this odd bankruptcy … Continue Reading

District Court Rejects Purdue Pharma’s Chapter 11 Plan Over Non-Consensual Releases Provided to Sackler Family

On December 16, 2021, United States District Judge Colleen McMahon of the Southern District of New York overturned the confirmation of Purdue Pharma’s chapter 11 plan of reorganization, “put[ting] to rest” the non-consensual third-party releases debate that has “hovered over bankruptcy law for thirty five years.”  Judge McMahon concluded in her 142-page opinion that “the … Continue Reading

Restructuring Foreign Companies in England Using a Restructuring Plan

A restructuring plan may well be a very effective way of restructuring a foreign company. It has several advantages over a scheme of arrangement and with a relatively low entry threshold, the English court has already sanctioned at least one plan for a foreign company in the relatively short time that it has been available.  … Continue Reading

Congress Proposes Significant Bankruptcy Code Changes to Protect Tort Claimants and Creditors

Two controversial mechanisms are available in many circuits to assist parties in a chapter 11 case to reach a global resolution and obtain plan confirmation:  non-consensual third-party releases and preliminary stays against third-party litigation.  On July 28, 2021, the House Committee on the Judiciary Subcommittee on Antitrust, Commercial and Administrative Law announced proposed legislation, the … Continue Reading

You Shall Not Pass – Bankruptcy Court in Intelsat Grants Debtors’ Motion to Seal Hearing

On April 19, 2021, the United States Bankruptcy Court for the Eastern District of Virginia granted a motion (the “Seal Motion”) filed by the Intelsat S.A. debtors (the “Debtors”) to seal the hearing on the Debtors’ motion to extend exclusivity and motion to compel plan mediation.  Although bankruptcy courts routinely grant motions to seal content … Continue Reading

Equitable Mootness Strikes Again: The Near Impossibility of Challenging a Debtor’s Critical Vendor Decisions

Although debtors who file for Chapter 11 bankruptcy generally cannot pay prepetition debts until a plan which complies with the “absolute priority rule” is confirmed, there are a number of now well-established exceptions to this rule.  As noted (although not actually ruled upon) by the United States Supreme Court in its controversial “Jevic” decision, “[c]ourts, … Continue Reading

Cannabis and Bankruptcy: 2020 in Review

In 2020, bankruptcy court doors continued to be shut to cannabis companies.  Perhaps most troubling is the continued bar for companies that are only tangentially involved in the state-legalized cannabis industry.  Although outlier cases exist, and even though courts have hinted that bankruptcy may be appropriate for some cannabis-related individuals and companies in some situations, … Continue Reading

The Supreme Court Confirms That Passive Retention of Property Does Not Violate Section 362(a)(3)

On January 14, 2021, the Supreme Court unanimously held in City of Chicago v. Fulton that a creditor’s passive retention of a debtor’s property does not violate section 362(a)(3) of the Bankruptcy Code. The Court’s 8-0 decision (Justice Barrett did not participate in the consideration or decision of the case) may have the unintended effect … Continue Reading

Webinar Recording: What Happens After the Election? – What the Outcome of the Presidential and Senate Races Might Mean for the Economy, Key Industries and Municipalities

On Friday, October 16, 2020 we hosted a webinar along with the American Bankruptcy Institute, that featured a distinguished panel of professionals, including former Speaker of the US House of Representatives John Boehner, former Congressman and Chairman of the Democratic Caucus Joseph Crowley, former Congressman Bill Shuster, former Secretary of Transportation Rodney Slater, Karol Denniston … Continue Reading
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