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Bankruptcy Code Standing Creditors

Jones Day

U.S. Supreme Court Bankruptcy Update

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The U.S. Supreme Court handed down three bankruptcy rulings to finish the Term ended in July 2024. The decisions address the validity of nonconsensual third-party releases in chapter 11 plans, the standing of insurance...more

Jones Day

Ability of Creditors' Committees to Prosecute Estate Claims Given a Boost in Delaware Bankruptcy Courts

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The practice of conferring "derivative standing" on official creditors' committees or individual creditors to assert claims on behalf of a bankruptcy estate in cases where the debtor or a bankruptcy trustee is unwilling or...more

Proskauer Rose LLP

Conflict Between Delaware LLC Act and Bankruptcy Code Affects Creditor Toolbox

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As you know from our prior alerts, creditors of borrowers formed as Delaware LLCs (as opposed to corporations) lack standing under Delaware law to sue directors for breaching fiduciary duties even when, to the surprise of...more

Mintz - Bankruptcy & Restructuring Viewpoints

Delaware Bankruptcy Court Grants Derivative Standing to Creditors’ Committee to Sue Members and Officers of Delaware LLC

In early February, a Delaware bankruptcy judge set new precedent by granting a creditors’ committee derivative standing to pursue breach of fiduciary duty claims against a Delaware LLC’s members and officers. At least three...more

Jones Day

Second Circuit: Bankruptcy Courts Have Inherent Authority to Impose Civil Contempt Sanctions

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Because bankruptcy courts were created by Congress rather than under Article III of the U.S. Constitution, there is a disagreement over whether bankruptcy courts, like other federal courts, have "inherent authority" to impose...more

Jones Day

Ninth Circuit: Standard for Constitutional Standing Applies to Bankruptcy Appeals

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Federal appellate courts have traditionally applied a "person aggrieved" standard to determine whether a party has standing to appeal a bankruptcy court order or judgment. However, this standard, which requires a direct,...more

Rosenberg Martin Greenberg LLP

Is the End Near for Third Party Releases In Chapter 11 Plans?

When the Bankruptcy Reform Act of 1978, the foundation on which the current Bankruptcy Code is constructed, was enacted, bankruptcy cases customarily involved a debtor addressing claims only against it. Consistent with that...more

Patterson Belknap Webb & Tyler LLP

Recent Decision on Derivative Standing by a Creditors’ Committee to Challenge a Lender’s Liens

In many chapter 11 cases, creditors’ committees can play a vital role in maximizing the recoveries of unsecured creditors. But the powers of creditors’ committees are circumscribed by both the Bankruptcy Code and case law....more

Jones Day

Voting Right Assignment Unenforceable, But Subordinated Creditor Lacked Standing to Participate in Chapter 11 Plan Confirmation...

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In In re Fencepost Productions Inc., 2021 WL 1259691 (Bankr. D. Kan. Mar. 31, 2021), the U.S. Bankruptcy Court for the District of Kansas recently addressed the enforceability of a provision in a pre-bankruptcy subordination...more

Dorsey & Whitney LLP

2020 Recap: Corporate Restructuring Review

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Amidst a global pandemic, there were plenty of interesting bankruptcy and restructuring events and changes that occurred in 2020. We saw new Bankruptcy Code amendments go into effect (through the Small Business Reorganization...more

Jones Day

Creditors' Committee Denied Standing to Bring Derivative Claims on Behalf of LLC Debtor in Bankruptcy

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The practice of conferring "derivative standing" on official creditors' committees to assert claims on behalf of a bankruptcy estate in cases where the debtor or a bankruptcy trustee is unwilling or unable to do so is a...more

Kramer Levin Naftalis & Frankel LLP

Third Circuit Opinion Clarifies Creditors Can Pursue Claims Abandoned by Bankruptcy Trustees

The Third Circuit, in Artesanias Hacienda Real S.A. de C.V. v. N. Mill Capital, LLC (In re Wilton Armetale, Inc.), 968 F.3d 273 (3d Cir. 2020), issued a decision with potential implications for creditors who wish to pursue...more

Dechert LLP

Second Circuit Paves a Way to Protect LBO Payments from Avoidance Actions 

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The Second Circuit Court of Appeals recently held in In re Tribune Company Fraudulent Conveyance Litigation, No. 13-3992-cv (L) (2d Cir., Dec. 19, 2019) that Bankruptcy Code Section 546(e) barred claims seeking to avoid...more

Skadden, Arps, Slate, Meagher & Flom LLP

Second Circuit Recognizes ‘Customer’ Safe Harbor in Tribune LBO Litigation

As we had anticipated in our prior client alerts, the “customer” safe harbor defense to constructive fraudulent conveyance claims challenging securities transactions — which was flagged by the U.S. Supreme Court in Merit...more

Kramer Levin Naftalis & Frankel LLP

Court Holds that Holders of Nonrecourse Debt Do Not Have Standing to File Involuntary Bankruptcy Petition

The Bottom Line - The Bankruptcy Court for the Southern District of New York recently held in Taberna Preferred Funding IV, Ltd. v. Opportunities II Ltd. (In re Taberna Preferred Funding IV, Ltd.), No. 17-11628 (MKV),...more

Bass, Berry & Sims PLC

Chris Lazarini Discusses Fraudulent Transfers During Broker Bankruptcy Filing

Bass, Berry & Sims attorney Chris Lazarini discussed a case involving an arbitration award and bankruptcy filing. The court ruled that where a bankruptcy action has been closed, the bankruptcy trustee's exclusive authority to...more

Sheppard Mullin Richter & Hampton LLP

Dodd-Frank’s Intersection with the Bankruptcy Code Could Have Significant Impact for Unsecured Creditors

On February 11th, the three private plaintiff-appellants and eleven State plaintiff-appellants in State National Bank of Big Spring, et al. v. Jacob J. Lew, et al. filed briefs with the U.S. Court of Appeals for the District...more

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