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Labor & Employment Bankruptcy

Read need-to-know updates, commentary, and analysis on Labor & Employment issues written by leading professionals.

The Third Circuit Weighs In On The Warn Act

by Cole Schotz on

Short Summary- In In re AE Liquidation, Inc., 866 F.3d 515 (3d Cir. 2017), the Third Circuit answered two important legal questions under the Worker Adjustment and Retraining Notification Act of 1988 (the WARN Act). ...more

Troubling Court Decision Sends Withdrawal Liability Warning To Employers

by Fisher Phillips on

A federal appeals court has handed multiemployer pension plans a blank check to assess increased withdrawal liability against employers exiting a plan. The 11th Circuit Court of Appeals’ recent decision in Westrock RKT...more

Exporting ERISA After Walter Canada

by Latham & Watkins LLP on

Latham & Watkins partners Bradd Williamson and Mitchell Seider discuss the recent Canadian court decision that dismisses ERISA controlled group claims and its potential impact on lenders and other creditors in restructuring...more

Without WARN-ing: Third Circuit Clarifies WARN Act's Unforeseen Business Circumstances Exception

by Jones Day on

Valera v. AE Liquidation, Inc., the Third Circuit Court of Appeals agreed with five other circuits in holding that WARN notice was not required where an external event outside the employer's control triggering layoffs was...more

Third Circuit Applies More Flexible Standard for WARN Exemption

The Third Circuit, in In re AE Liquidation, Inc., Case No. 16-2203 (3d Cir. Aug 04, 2017) held that the Debtors were not liable under the WARN Act for failing to warn employees of furloughs and layoffs until those furloughs...more

Third Circuit Holds No Need to Warn Under WARN ACT Unless Circumstances Causing Layoff Are Probable

by Dechert LLP on

The Worker Adjustment and Retraining Notification (WARN) Act in the U.S. requires that employers give sixty days’ notice to its employees before effecting a mass layoff. The WARN Act contains exceptions to the notice...more

Lehman Ruling Sets Stage For Future Subordination Contests

In the case In re Lehman Brothers Holdings Inc., 855 F.3d 459 (2d Cir. 2017), the U.S. Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Brothers employees for...more

In Brief: Second Circuit Reaffirms Broad Scope of Bankruptcy Code’s Subordination of Shareholder Claims

by Jones Day on

Section 510(b) of the Bankruptcy Code provides a mechanism designed to preserve the creditor/shareholder risk allocation paradigm by categorically subordinating most types of claims asserted against a debtor by equityholders...more

Exculpatory Provisions Under Delaware Law: Say What You Mean And Mean What You Say

Exculpation provisions in operating agreements must be carefully crafted in order to protect members, managers, directors and officers for breaches of fiduciary duties...more

Second Circuit: Reclassification of Claim as Equity Interest? Not Unless It Is Duplicative

The Second Circuit affirmed the bankruptcy and district courts’ decisions subordinating claims asserted against the Debtor by holders of restricted stock units. However, while the court agreed with the lower courts that the...more

FAQ: Recent Developments in US Law Affecting Pension and OPEB Claims in Restructurings (2017)

by Latham & Watkins LLP on

From theory to practice, planning to enforcement, the answers to 42 of the most frequently asked questions can help you prepare, cope or respond to a restructuring. This Client Alert answers some of the most frequently asked...more

ERISA Benefits and a Claimant’s Bankruptcy: When Judicial Estoppel Requires Dismissal of Lawsuits Seeking Long Term Disability...

Don’t forget that... judicial estoppel can require dismissal of a claimant’s suit for ERISA-governed long term disability (LTD) benefits if the claimant failed to list the “potential cause of action” in bankruptcy filings....more

Court of Appeal Permits Union Certification Application in Face of Insolvency Stay of Proceedings

by Bennett Jones LLP on

The Ontario Court of Appeal recently released a decision allowing a certification application by a union to proceed in the face of a receivership of the employer. The decision garnered a strong dissent from Justice Lauwers,...more

Your Daily Dose of Financial News

by Robins Kaplan LLP on

The Fed wrapped up its Open Market Committee meeting yesterday without any change in interest rates but with an expression of confidence in the economy, despite Q1’s sub-1 percent growth figure (which it dubbed “transitory”)....more

Keep On Truckin’: Priority Rules Still Rule in Structured Dismissals

In 2015, Distressing Matters reported on the Third Circuit’s decision in In re Jevic Holding Corp., wherein that panel ruled that, in rare circumstances, bankruptcy courts may approve the distribution of settlement proceeds...more

Supreme Court Absolutely Affirms the Absolute Priority Rule

by Ward and Smith, P.A. on

The United States Supreme Court recently decided a case that impacts lenders and other creditors in Chapter 11 bankruptcy proceedings. The Supreme Court held that a bankruptcy court may not approve a “structured dismissal” of...more

Supreme Court Limits Use of Structured Dismissals of Chapter 11 Cases

by Holland & Knight LLP on

In a 6-2 decision on March 22, 2017, the U.S. Supreme Court determined that bankruptcy courts may not approve a structured dismissal of a Chapter 11 case that provided for distributions of estate funds that do not follow...more

Supreme Court Bars Structured Dismissals of Bankruptcy Cases That Violate the Code’s Priority Distribution Scheme – Could it...

by Foley & Lardner LLP on

On March 22, 2017 the Supreme Court issued its long-awaited ruling regarding the legality of structured dismissals of Chapter 11 bankruptcy cases that would make final distributions of estate assets to creditors in a manner...more

Yes, Virginia, there is a Code Priority Scheme: Supreme Court Strikes Down Structured Dismissals in Jevic

by Foley & Lardner LLP on

A potential threat to the Code’s priority scheme is the allowance of “structured dismissals,” which include a settlement as part of the dismissal of the chapter 11 case that would distribute estate assets in a manner that...more

U.S. Supreme Court Invalidates Non-Consensual Structured Dismissal Deviating from Bankruptcy Priority Scheme

by Jones Day on

The U.S. Supreme Court ruled on March 22, 2017, in Czyzewski v. Jevic Holding Corp., that without the consent of affected creditors, bankruptcy courts may not approve "structured dismissals" providing for distributions that...more

Absolute Priority Remains Absolute – US Supreme Court Holds Structured Dismissals Cannot Violate Priority Rules

by Dechert LLP on

In a highly anticipated bankruptcy opinion, the United States Supreme Court, in Czyzewski v. Jevic Holding Corp., held that courts may not approve structured dismissals providing for distributions that deviate from the...more

U.S. Supreme Court Rules WARN Claimants/Workers Must Get Priority Over Other Unsecured Creditors In Bankruptcy

by Seyfarth Shaw LLP on

Seyfarth Synopsis: A bankruptcy court overseeing an employer’s Chapter 11 bankruptcy proceeding allowed the employer to pay certain unsecured creditors before paying Worker Adjustment And Retraining Notification Act (“WARN”)...more

Supreme Court Gives WARN-ing To Companies In Bankruptcy: Don’t Ignore Wage Claims

by Fisher Phillips on

The U.S. Supreme Court held today in a 6 to 2 decision that “structured dismissals” resolving Chapter 11 bankruptcy proceedings cannot deviate from the Bankruptcy Code’s priority scheme without the consent of the affected...more

Key issues facing the UK residential care home sector

by DLA Piper on

Historical backdrop - The collapse of over 750 care homes operated by the Southern Cross group in 2011 following rapid expansion financed by the sale of leases of its homes exposed the financial risks inherent in the...more

Second Court of Appeals Win for State Street Bank in $200 Million Chrysler “Top Hat Plan” Class Action

by McDermott Will & Emery on

“Top hat plans” have many attractive features, but a new court decision is a reminder that top hat plan participants have limited protections under ERISA – and that assets held in a rabbi trust are not protected from the...more

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