Mayer Brown partners Tyler R. Ferguson, Aaron Gavant, and Sean T. Scott and associate Samuel R. Rabuck recently published an article for Mayer Brown’s Perspectives & Events portal on the January 13, 2022, decision in which Judge David Novak of the US District Court for the Eastern District of Virginia vacated the bankruptcy court’s order
Law360 reports that Coinbase included new bankruptcy-related risk factors in a recent SEC filing, explaining that “custodially held” digital assets (i.e., cryptocurrency) could be considered property of a bankruptcy estate if the company were to file for bankruptcy and that Coinbase customers could be treated as general unsecured creditors, which would decrease their likelihood of
The Wall Street Journal reports that Pennsylvania-based Armstrong Flooring Inc. filed for chapter 11 bankruptcy relief in Delaware on May 8, 2022, citing supply chain disruptions and increased costs for materials and transportation. Armstrong Flooring, a publicly-traded company that was founded in 1860, stated that it intends to pursue a sale of its business through
On January 20, 2022, Mayer Brown Restructuring lawyers Louis Chiappetta (Partner), Lucy Kweskin (Partner), and Samuel Rabuck (Associate) published an article in Law360 on a recent ruling from an adversary proceeding in the In re The Hertz Corp. bankruptcy case by the Delaware Bankruptcy Court on the enforceability of make-whole premiums in bankruptcy.
Given the
Reuters reports that a district court judge has deferred to the bankruptcy court on whether Johnson & Johnson is entitled to the continuing protection of the Bankruptcy Code’s automatic stay from mass tort lawsuits that it would otherwise face relating to its talc products while its subsidiary, LTL Management, proceeds through bankruptcy. A committee of
Partially walking back her prior pronouncements suggesting that she would rule to the contrary (which we previously wrote about here), on October 13, 2021, District Court Judge Colleen McMahon denied the U.S. Trustee’s request for an emergency stay pending appeal of the Purdue Pharma confirmation order. In a related order issued three days earlier, Judge McMahon had noted that she “fully” intended to grant the stay request so long as she had jurisdiction to do so. In the end, however, the District Court was persuaded to deny the request based on the debtors’ agreement not to raise equitable mootness as a defense to the appeal and by the debtors’ commitment to provide 14 days’ advance notice of the plan going fully effective. The U.S. Trustee had argued that a stay was still required, notwithstanding these conditions, given the weightiness of the issues at stake and the potential for later equitable mootness-related issues. While sympathizing with this position, the District Court ultimately found that the U.S. Trustee had not shown a sufficient likelihood of any “concrete harm” that could arise between the date of the District Court’s ruling and the next-scheduled hearing on the nearly identical stay motion back in the Bankruptcy Court. The District Court nonetheless emphasized that it would “not allow this appeal to be equitably mooted” and if, at any time, “it appears that imminent action might lead to that result,” the movants were invited to “knock on [Judge McMahon’s] door.”
Continue Reading Stay and Direct Appeal Requests Denied in Purdue Pharma; District Court Commits to Shielding Case from Equitable Mootness Concerns
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
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