Non-Consensual Third-Party Releases In Bankruptcy Disallowed

In a recent opinion, Honorable Colleen McMahon of U.S. District Court for the Southern District of New York, ruled that non-consensual releases of creditors’ direct claims against non-debtors in a Bankruptcy reorganization plan are not allowed under the provisions of the United States Bankruptcy Code. In Re: Purdue Pharma LP. This ruling reverses the Bankruptcy Court’s order approving Purdue Pharma’s Chapter 11 Plan of Reorganization which, among other things, provided for the release of the […]

By | October 17th, 2022 ||

Ninth Circuit Holds Unimpaired Unsecured Creditors Entitled To Post-Bankruptcy Interest On Claims At Contractual Default Rate

“Under the long-standing ‘solvent-debtor exception,’ plaintiffs [unsecured trade creditors] possess an equitable right to receive post-petition interest at the contractual or default state law rate, subject to any other equitable considerations, before [the debtor] collects surplus value from the bankruptcy estate,” held the Ninth Circuit on Aug. 29, 2022. In re PG&E Corporation, 2022 WL 3712498, *4 (9th Cir. Aug. 29, 2022) (2-1). “No circuit court [had] addressed the issue [i.e., rate of post-petition interest to […]

By | October 12th, 2022 ||

Texas District Court: Bankruptcy Sale Break-Up Fee Satisfied Both Business Judgment Test And Administrative Expense Standard

Bankruptcy and appellate courts disagree over the standard that should apply to a request for payment of a break-up fee or expense reimbursement to the losing bidder in a sale of the debtor’s assets outside the ordinary course of the debtor’s business. Some apply a “business judgment” standard, while others require that the proposed payments satisfy the more rigorous standard applied to administrative expense claims. The U.S. District Court for the Southern District of […]

By | October 3rd, 2022 ||