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Two recent decisions from Delaware illustrate somewhat divergent views from the bankruptcy bench on the proper procedures for obtaining non-debtor releases in confirmed plans of reorganization. In both In re Emerge Energy Services LP, et al.1 and In re Cloud Peak Energy Inc., et al.2 the debtors’ initial, and then certain subsequent, efforts at plan confirmation were stymied by proposed opt-out procedures. Ultimately, both debtors were able to confirm their plans after adjusting the applicable release provisions, as described below. Collectively, these decisions demonstrate how closely many courts will scrutinize non-debtor releases and the importance of designing procedures for obtaining consent to such releases that demonstrate that they are procedurally fair.
Continue Reading Recent Delaware Decisions Show Divergent Views on Third-Party Release Procedures

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Law360 reports that Bar Louie secured approval for its sale procedures on Thursday, February 27, 2020. Judge Mary Walrath of the United States Bankruptcy Court for the District of Delaware approved the sale procedures after cutting the stalking horse bidder’s breakup fee by $1.4 million and eliminating a 1% reimbursement fee intended to be paid…

Forty-two state Attorneys General have signed on to a National Association of Attorneys General letter in support of H.R. 4421, which seeks to limit forum shopping in chapter 11 cases by limiting the jurisdiction in which a debtor may file to the jurisdiction where its principal assets are located or the jurisdiction where its principal…