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Constitutional Law Bankruptcy

Read Constitutional Law updates, alerts, news, and analysis from leading lawyers and law firms:

We, the Releasees: Delaware Bankruptcy Court Holds That It Had Constitutional Authority to Approve Nonconsensual Third-Party...

by Shearman & Sterling LLP on

On October 3, 2017, Bankruptcy Judge Laurie Selber Silverstein of the United States Bankruptcy Court for the District of Delaware issued a decision holding that the Bankruptcy Court had constitutional authority to approve...more

Millennium Lab Part II: Delaware Bankruptcy Court Dispels Shadow Over Non-Consensual Third-Party Releases (For Now)

by Dechert LLP on

In trotting a path out of Chapter 11, debtors in most cases will need to engage various key stakeholders, some of whom are not entitled to a distribution in the bankruptcy. As a form of remuneration, non-debtors may insist on...more

Debt Dialogue: July 2017 - A New Millennium: Bankruptcy Courts May Lack Constitutional Authority to Approve Nonconsensual Plan...

Third-party releases have become a common and oft-litigated issue in connection with confirmation of a Chapter 11 plan. This is especially so if the party being released is the target of claims arising out of questionable...more

Bankruptcy courts cannot approve structured dismissal of Chapter 11 case that violates absolute priority rule

by Snell & Wilmer on

In Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973 (2017), the U.S. Supreme Court held that a bankruptcy court was not authorized to approve a structured dismissal of a Chapter 11 case that violated the absolute priority...more

Eleventh Circuit Addresses Difference Between Constitutional and Equitable Mootness

by Jones Day on

In Beem v. Ferguson (In re Ferguson), 2017 BL 101650 (11th Cir. Mar. 30, 2017), the U.S. Court of Appeals for the Eleventh Circuit addressed the distinction between constitutional mootness (a jurisdictional issue that...more

Sixth Circuit Rejects Per Se Rule Automatically Mooting Sale Appeals in the Absence of a Stay

by Jones Day on

Debtors beware: The Sixth Circuit Court of Appeals has recently expanded the ability of parties to appeal a bankruptcy court's approval of a sale of assets notwithstanding the statutory mootness rule set forth in section...more

Substantive Consolidation of Non-Debtors-Standing and Notice Issues

by Dechert LLP on

U.S. courts generally agree that the substantive consolidation should be applied sparingly, and even more so when substantive consolidation of debtors with non-debtors is sought. While many opinions address the grounds for...more

Millenium Lab Holdings – Ruling on Third Party Releases Highlights Continuing Constitutional Questions Regarding Power of...

by Kelley Drye & Warren LLP on

In Millenium Lab Holdings, Delaware District Court Judge Leonard Stark, on an appeal from a bankruptcy court order confirming a plan of reorganization, recently upheld a challenge to the bankruptcy court’s constitutional...more

Debt Dialogue: April 2017 - Creditor Barred from Bringing a Derivative Action Against an Insolvent Delaware Limited Liability...

In a recent ruling, Trusa v. Nepo (Del. Ch. April 13, 2017), consistent with prior case law, Vice Chancellor Montgomery-Reeves of the Delaware Chancery Court held that a creditor cannot bring a derivative action against a...more

Bankruptcy Court Imposes Massively Disproportionate $45 Million Punitive Exaction, Then Plays Santa Claus With $40 Million Of It

A bankruptcy judge in the Eastern District of California recently issued a decision that is sure to raise appellate eyebrows. Concluding in In re Sundquist that the defendant bank had violated the automatic stay by...more

Sixth Circuit Adopts Minority Interpretation of Mootness

by Robins Kaplan LLP on

The United States Court of Appeals for the Sixth Circuit recently held that parties arguing mootness under section 363(m) of the Bankruptcy Code must establish that the appellate court is unable to grant effective relief...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

For Whom the Bell Tolls: Obligations and Risks of Third-party Witnesses under Rule 2004 Examinations.

by Bryan Cave on

Two recent Bankruptcy Court cases both remind and illustrate the power and risks presented by discovery of facts and documents under Bankruptcy Rule 2004, showing that it can compel third parties to provide information to...more

Stern Amendments to Bankruptcy Rules

by Bryan Cave on

While it has taken five years of committee and court efforts, the “Stern Amendments” to the Federal Rules of Bankruptcy Procedure will become effective December 1, 2016. These amendments will streamline litigant and court...more

Business Litigation Report - August 2016

Circuit Courts Align to Shield SEC Administrative Proceedings from Collateral Constitutional Attack - In response to the financial crisis of the late 2000s, Congress passed the Dodd-Frank Wall Street Reform and Consumer...more

General Motors: Protection Granted in Section 363 Sale Orders is Only as Good as the Notice Given

by Dechert LLP on

In a recent decision by the U.S. Court of Appeals for the Second Circuit in the General Motors case, the court held certain claimants were not afforded procedural due process with respect to the § 363 sale of General Motor...more

The Supreme Court - June 2016 #3

by Dorsey & Whitney LLP on

The Supreme Court of the United States issued decisions in three cases on June 13, 2016: - Puerto Rico v. Franklin Cal. Tax-Free Trust, No. 15-233: Under the Federal Bankruptcy Code, state bankruptcy laws that enable...more

Three Strikes and Recovery Act is Out

Today’s U.S. Supreme Court decision in Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust puts an end to one of Puerto Rico’s multi-pronged efforts to deleverage itself. Given the comprehensiveness of the...more

Bankruptcy Petition Costs Litigant Right to Appeal State Court

by Burr & Forman on

Learning the interplay between state rules of judicial procedure and federal bankruptcy law can be a daunting undertaking, but the pitfalls of failing to do so can be severe. A recent example of the importance of being...more

Supreme Court Issues Opinions Favorable to Financial Services Companies

May is usually a busy month on the Supreme Court before the justices head off for some summer R&R. It is historically a time when many opinions are issued, and May 2016 has been no exception. ...more

The Supreme Court - May 2016 #2

by Dorsey & Whitney LLP on

The Supreme Court of the United States issued decisions in six cases today: Spokeo, Inc. v. Robins, No. 13-1339: The Fair Credit Reporting Act of 1970 (“FCRA”) imposes a number of requirements regarding the creation and...more

UCC Standing Blocked in Recent Sabine Decision

by Morrison & Foerster LLP on

What showing must creditors make to be granted the right to prosecute claims on behalf of the bankruptcy estate? Under the widely recognized standard established by the Second Circuit in In re STN Enterprises, a bankruptcy...more

Second Circuit Limits Creditors’ Ability to Claw Back LBO Payments

by Dechert LLP on

A recent decision by the U.S. Court of Appeals for the Second Circuit, In re Tribune Company Fraudulent Conveyance Litigation,1 represents a significant victory for shareholders who may get cashed out in connection with a...more

You Can Lead a Horse to Water, But You Can’t Call it an Airplane: Supreme Court Oral Arguments Suggest Puerto Rico’s Recovery Act...

A few thoughts on Tuesday’s oral arguments before the U.S. Supreme Court in the litigation over whether Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act, an insolvency statute for certain of its government...more

Guarantor Standing Under Reg. B Unresolved After Hawkins v. Community Bank of Raymore

by Stinson Leonard Street on

“The judgment is affirmed by an equally divided Court.” With that one sentence, the Supreme Court case of Hawkins v. Community Bank of Raymore, Case No. 14-520 came to an end. The first 4-4 decision from the Court since the...more

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