In enacting the Bankruptcy Code in 1978, Congress recognized, as public policy, a need to ensure that professional services provided to a trustee or debtor in possession were provided by skilled, competent professionals.
Committees
In an opinion issued on January 13, 2022, Judge David Novak of the United States District Court for the Eastern District of Virginia struck down non-consensual third-party releases [2] from a plan confirmed by the bankruptcy court.
In bankruptcy, a debtor-in-possession’s chief goal is to get its plan of reorganization confirmed by the bankruptcy court.
Seeking relief under the Bankruptcy Code is a common method of restructuring a business pushed into insolvency by tort claims. Under current law, filing a petition under chapter 11 of the Bankruptcy Code allows a business to stay all litigation against it and propose a plan of reorganization that channels tort claims to a settlement trust for valuation and payment.
Since going effective on Feb. 19, 2020, much has been written regarding the restructuring benefits of a chapter 11, subchapter V case. Prior to its implementation, many small businesses were, from a practical standpoint, unable to benefit from chapter 11 due to the expense of filing and prosecuting a traditional chapter 11 case.
The approval of third-party releases in connection with the confirmation of a debtor’s chapter 11 plan before a bankruptcy court has become increasingly controversial and the subject of several recent district court decisions.
In May 2021, the ABI Journal examined the recently-added “reasonable due diligence” requirement of 11 U.S.C. § 547(b), [1] with an in-depth analysis of how such a requirement may shift the burdens of proof assigned in 11 U.S.C. § 547(g).
The term “mootness” refers to a category of related precepts that preclude a reviewing court from reaching the underlying merits of a controversy. While questions dog this doctrine’s constitutional and prudential forms outside of the Bankruptcy Code’s ambit, few doubt either’s general validity. However, within bankruptcy’s periphery, more substantive questions abound.
There are so many involved details and items turnaround professionals have to deal with when they are brought in to help reorganize a company. It is very tempting to fall into a false sense of security when you can just check off the “got it” box without delving into a detailed analysis of complicated issues.
Tax-Sharing Agreements in Bankruptcy that Have Been the Subject of Recent Appeals Courts Decisions
The Business Reorganization Committee held a free committee wide call on Tuesday, September 23rd, at 4 pm ET. The topic was titled "Looking at International Insolvency/Restructurings Through the Bankruptcy Code and Beyond," and featured key speakers, including: Patrick Mohan (Moderator) of Reorg Research (Columbia, S.C.), Rachel Ehrlich Albanese of Akin Gump Strauss Hauer & Feld LLP (New York).
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