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Bankruptcy Court Good Faith

Jones Day

Disappointed Bidder in Bankruptcy Asset Sales Waived Argument that Buyers Did Not Act in Good Faith by First Raising It on Appeal

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The finality of asset sales in bankruptcy is an indispensable feature of U.S. bankruptcy law designed to maximize the value of a bankruptcy estate as expeditiously as possible for the benefit of all stakeholders. To promote...more

Jones Day

Imputation of Agent's Knowledge to Transferee in Bankruptcy Avoidance Litigation Defeats Good-Faith Defense

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In situations where a bankruptcy court avoids a fraudulent transfer or similar transaction, subsequent transferees who received proceeds of the avoided transaction from the initial transferee can avoid liability in certain...more

DLA Piper

Delaware District Court Sheds Light on Standards for Dismissal of Chapter 11 Case Based on Bad Faith

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On August 28, 2024, Judge Gregory B. Williams of the US District Court for the District of Delaware issued a ruling in AIG Financial Products Corporation, Civ. No. 23-573, affirming an order on appeal from the Delaware...more

Seward & Kissel LLP

Two Left Feet, Block Sale, and Lobster Clause

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US Senate bill aims to curb Texas Two-Step bankruptcies | Reuters - On Tuesday, U.S. Senators introduced a bipartisan bill intended to discourage the Texas Two-Step. The bill aims to deter financially healthy companies...more

Mintz

Recent Bankruptcy Court Decision Leaves the Door Open to Bankruptcy Relief for Those in the Cannabis Industry

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A Massachusetts Bankruptcy Court’s recent appellate decision in Blumsack v. Harrington (In re Blumsack) leaves the door open for those employed in the cannabis industry to seek bankruptcy relief where certain conditions are...more

Jones Day

Objections to Bankruptcy Asset Sale Did Not Rise to Level of "Adverse Interest" Defeating Buyer's Good-Faith Status

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The finality of asset sales and other transactions in bankruptcy is an indispensable feature of U.S. bankruptcy law designed to maximize the value of a bankruptcy estate as expeditiously as possible for the benefit of all...more

Proskauer Rose LLP

Final Ruling in Serta Reaches Decision on “Open Market Purchase”

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Background In November 2016, Serta Simmons Bedding, LLC and certain affiliates (collectively, the “Debtors”) entered into credit facilities which provided for (i) $1.95 billion in first lien term loans (the “2016 Credit...more

King & Spalding

U.S. Bankruptcy Court for the Southern District of Texas Upholds “Uptier” Transaction in Serta Bankruptcy Case

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On June 6, 2023, the U.S. Bankruptcy Court for the Southern District of Texas upheld an “uptier” transaction in which Serta Simmons, before it filed for bankruptcy, provided some of its existing lenders with new priming loans...more

Bracewell LLP

Use It or Lose It: U.S. Supreme Court Unanimously Holds in MOAC Mall Holdings LLC That 363(m) Protections Can Be Waived

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The U.S. Supreme Court recently issued its latest bankruptcy opinion in MOAC Mall Holdings LLC v. Transform Holdco LLC, holding that the Bankruptcy Code’s rule against invalidating 363 sales after appeal is not an iron-clad...more

Tucker Arensberg, P.C.

LTL, Part Deux (now with even more fraudulent transfers!)

Tucker Arensberg, P.C. on

Here we go again. Precisely one hour and thirty-nine minutes after the dismissal of the bankruptcy filing of LTL, Johnson & Johnson’s artificially created talc-liability subsidiary, the company was right back at it again with...more

Bracewell LLP

Lightning Round: LTL Management Files “Chapter 22” Case Immediately Following Bankruptcy Court’s Dismissal of its Prior Bankruptcy

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Just hours after the United States Bankruptcy Court for the District of New Jersey entered an order dismissing the Chapter 11 Case of Johnson & Johnson subsidiary, LTL Management, as a bad faith filing, LTL filed for Chapter...more

Cadwalader, Wickersham & Taft LLP

Third Circuit Dismisses J&J Affiliate LTL’s Talc Liability Chapter 11 Filing; “Good Faith” Under 1112(b) Requires Financial...

Executive Summary: On January 30, 2023, the U.S. Court of Appeals for the Third Circuit (the “Court”) issued an opinion in In re LTL Management, LLC, No. 22-2003, 2023 WL 1098189, at *1 (3d Cir. Jan. 30, 2023) (“LTL...more

Bracewell LLP

Texas "Two-Step" Forward, Three Steps Back for Mass Tort Debtors in the Third Circuit After LTL

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In a decision that may provide much-needed boundaries around the permissibility of debtors created from “out-of-the-box” prepetition corporate transactions, on January 30, 2023, the United States Court of Appeals for the...more

Maron Marvel

3rd Circuit Rejects Johnson & Johnson’s Effort To Set Up Subsidiary In Bankruptcy Court To Resolve Talc Asbestos Claims

Maron Marvel on

On January 30, 2023, the Third Circuit dismissed Johnson & Johnson (J&J)’s subsidiary LTL’s Chapter 11 bankruptcy petition because the facts did not support the financial distress required for the entity’s good faith filing...more

Moritt Hock & Hamroff LLP

Remedies for Refusing to Consummate a Settlement Agreement Reached at Mediation

Raising an allegation that a party has not participated in the mediation process in good faith has historically been a sensitive hot-button issue for mediators, parties, and even the courts. In fact, even on occasions where...more

Nelson Mullins Riley & Scarborough LLP

The Unredeemable Debtor

Bankruptcy law decisions are replete with references to the “worthy debtor.”  In re Carp, 340 F.3d 15, 25 (1st Cir. 2003); In re BankVest Capital Corp., 360 F.3d 291 (1st Cir.2004); In re Institute of Business and...more

Pillsbury Winthrop Shaw Pittman LLP

If You Know Something, Say Something, or Lose Good-Faith Protection in a Bankruptcy Sale

Asset purchasers that have actual or constructive knowledge of a competing interest yet fail to alert the bankruptcy court may be subjecting them to claims by competing interest holders in an otherwise free and clear sale. ...more

Jones Day

U.S. Supreme Court Bankruptcy Roundup

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This Term, the U.S. Supreme Court accepted certiorari in Siegel v. Fitzgerald (In re Circuit City Stores, Inc.), 996 F.3d 156 (4th Cir. 2021), cert. granted, No. 21-441 (U.S. Jan. 10, 2022), in order to resolve the growing...more

International Lawyers Network

Bankruptcy, Insolvency & Rehabilitation Proceedings in Canada (Updated)

KEY FACTS OF BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS UNDER CANADIAN LAW - 1. Canada's Political and Legal System - Canada has a Federal constitution that was significantly overhauled in the early 1980's,...more

Jones Day

New York Bankruptcy Court Rules that Good Faith Is Not the Gatekeeper to Chapter 15

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Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11 petition in good faith. The bankruptcy court can dismiss a bad faith filing "for cause,"...more

Jones Day

Business Restructuring Review | November–December 2021

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New York Bankruptcy Court Rules That Good Faith Is Not The Gatekeeper To Chapter 15 - Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11...more

Jones Day

Case Update: Second Circuit Breathes New Life Into Madoff Trustee's Efforts to Recover Ponzi Scheme Payments

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In In re Bernard L. Madoff Investment Securities LLC, 12 F.4th 171 (2d Cir. 2021), the U.S. Court of Appeals for the Second Circuit revived litigation filed by the trustee administering the assets of defunct investment firm...more

Jones Day

New York Bankruptcy Court Rules that Good Faith Is Not the Gatekeeper to Chapter 15

Jones Day on

Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11 petition in good faith. The bankruptcy court can dismiss a bad faith filing "for cause," which...more

Smith Debnam Narron Drake Saintsing & Myers,...

District Court Reverses Bankruptcy Court Order Imposing Sanctions on Mortgage Servicer

The U.S. District Court for the Eastern District of North Carolina recently reversed an order of the U.S. Bankruptcy Court for the Eastern District of North Carolina. The bankruptcy court order held mortgage servicer Newrez,...more

Smith Debnam Narron Drake Saintsing & Myers,...

District Court Reverses Bankruptcy Court Order Imposing Sanctions on Mortgage Servicer

The U.S. District Court for the Eastern District of North Carolina recently reversed an order of the U.S. Bankruptcy Court for the Eastern District of North Carolina. The bankruptcy court order held mortgage servicer Newrez,...more

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