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 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 ||

Classifying Creditors In Digital Asset Bankruptcy Cases

As digital asset markets continue to struggle, and multiple digital asset platforms seek refuge in Chapter 11 proceedings, courts will be confronted with several novel issues.

A previous article addressed how traditional bankruptcy recovery mechanisms might operate when the recoverable assets are digital assets recorded on a blockchain. This article discusses another critical issue: how digital asset customers will be classified under the Bankruptcy Code. The resolution of this thorny issue will significantly impact the […]

By | September 30th, 2022 ||