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On October 10, 2021, Judge Colleen McMahon of the U.S. District Court for the Southern District of New York entered a temporary restraining order, delaying implementation of Purdue Pharma’s plan of reorganization, which was confirmed by Bankruptcy Judge Robert Drain on September 17th, pending argument on the U.S. Trustee’s motion for a stay pending appeal

According to Bloomberg’s U.S. Bankruptcy Tracker, the amount of distressed bonds and loans traded in U.S. markets had the biggest weekly boost of this year, with distressed debt in the telecommunications and oil and gas industries driving the jump. [Bloomberg, Sept. 28, 2021]

The Wall Street Journal discusses a report issued by the Government

Bloomberg Law discusses pending petitions for certiorari seeking the U.S. Supreme Court’s review of lower courts’ application of the “equitable mootness” doctrine, which places significant limits on dissenting parties ability to appeal from orders confirming Chapter 11 plans of reorganization.   One such petition arises out of the Nuverra Environmental Solutions case, which we previously discussed

On September 1, 2021, Judge Robert Drain issued a much-anticipated oral ruling approving Purdue Pharma L.P.’s plan of reorganization. The plan, which has garnered significant attention from the media, legislators, academics, and practitioners, releases current and future members of the Sackler family and many of their associates and affiliated companies – none of whom filed for bankruptcy themselves – from liability in connection with any possible harm caused by OxyContin and other opioids that Purdue Pharma manufactured and distributed. In return for the liability releases, the Sacklers will, over a nine-year period, contribute up to $4.325 billion to a settlement fund from which payments will be made primarily to compensate victims and to fund initiatives to abate the opioid epidemic.

Continue Reading SDNY Bankruptcy Court OKs Purdue Pharma’s Plan of Reorganization Featuring Third-Party Releases for Sacklers in Exchange for Contributing $4.325 Billion to Opioid Victim Settlement Fund

Law360 reported that the U.S. Trustee’s Office filed a motion opposing a “death trap” provision contained in Avianca Holdings’ Chapter 11 plan of reorganization. In bankruptcy, so-called “death trap” provisions reward classes of creditors for voting in favor of plans of reorganization with higher payouts as an incentive for them to vote to accept a

The Wall Street Journal reports on bond managers’ continued chase for yield, in the continuing, historically low-rate environment, in which yields on even junk bonds have reached record lows not seen in over 30 years. In particular, the Journal notes that some fund managers have even started investing in unrated, illiquid bonds, increasing the risk

In its August 5th, 2021 VeroBlue Farms decision,[1] the Eighth Circuit lent its voice to a growing body of criticism of the equitable mootness doctrine contending that its use to bar challenges to confirmed reorganization plans should be circumscribed.  Laying out a new investigation that must be undertaken before using the doctrine to bar confirmation order appeals, the Eighth Circuit emphasized that reviewing courts must: (1) make “at least a preliminary review of the merits” of an appeal to determine the strength of the claims at issue; (2) assess the “amount of time that would likely be required” to resolve the merits of such claims on an expedited basis; and (3) consider the potential equitable remedies that might still be available even after a plan’s implementation, should the appeal prove successful, which would not undermine the plan or harm third parties.

Continue Reading Mootness Muted? – Eighth Circuit Circumscribes Use of Equitable Mootness Doctrine to Bar Bankruptcy Plan Appeals