Joining the Eighth and Ninth Circuit Courts of Appeals, the Fifth Circuit Court of Appeals recently held that a debtor or trustee can sell its avoidance actions to third-party, non-estate representatives. See Briar Capital Working Fund Capital, L.L.C. v. Remmert
Corporate Restructuring Review
The Corporate Restructuring Review, published by Dorsey & Whitney LLP, focuses on legal developments and issues related to corporate bankruptcy and restructuring. It covers topics such as the sale of avoidance actions, standards for bankruptcy court approvals of asset sales, third-party injunctions in mass tort bankruptcies, and Supreme Court rulings affecting bankruptcy sales and protections for good-faith purchasers. The blog also addresses emerging issues like the treatment of cryptocurrency in bankruptcy proceedings. It provides analysis of appellate court decisions and their implications for restructuring practitioners and stakeholders.
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Ninth Circuit Holds that Selling Peace Does Not Require Business Judgment
In Spark Factor Design, Inc., et al. v. Hjelmeset (In re Open Medicine Institute, Inc.), No. 22-60017 (9th Cir. Oct. 30, 2023), the Ninth Circuit Court of Appeals recently found that a bankruptcy court has discretion of whether to apply the…
Recent Divergent Views on Third-Party Injunctions in Mass Tort Bankruptcies
A third-party injunction in a chapter 11 bankruptcy is generally used to protect a non-bankrupt entity from liability that is shared with, or derivative of, a bankrupt entity. Third-party injunctions are difficult to obtain in any bankruptcy setting, because bankruptcy…
SCOTUS Removes a Partial Barrier to Challenging Unstayed Bankruptcy Sales to Good-Faith Purchasers
In MOAC Mall Holdings LLC v. Transform Holdco LLC, 134 S.Ct. 927, 937 (2023), the U.S. Supreme Court recently resolved a debate that has long divided Circuit Courts throughout the U.S: whether section 363(m) of the Bankruptcy Code, a provision that…
Maybe We Should Call It Cryptic Currency?
Notwithstanding that cryptocurrency is generally in the cloud, crypto purists will say that cryptocurrency is as valuable as dollar bills. However, the recent bankruptcy filings of five major crypto companies, including Celcius Network LLC (a lender) and FTX Trading Ltd.…
The Debate Over Make-Whole Provisions Continues in the Fifth Circuit
In re Ultra Petroleum Corporation is one case that has caused the Fifth Circuit Court of Appeals to revisit the permissibility of Make-Whole provisions, at least three times, over several years. Earlier discussions of the case have been the subject…