Business Reorganization

Over Thirty Years Later Johns-Manville Asbestos Litigation Still Alive

On June 30, 2016, the U.S. Bankruptcy Court for the Southern District of New York issued yet another decision around the Johns-Manville asbestos litigation. Before the court was Graphic Packaging International’s emergency motion to enforce the confirmation and channeling orders in the Johns-Manville Corp. (“Manville”) and the Manville Forest Products Corp. (“MFP”) chapter 11 cases. The motion sought to enjoin an asbestos-related lawsuit brought in Louisiana state court against Graphic, the successor of MFP.

Delaware Bankruptcy Court Disagrees with Second Circuit’s Law Concerning the Safe Harbor under 11 U.S.C. § 546(e)

The “safe harbor” under § 546(e) of the Bankruptcy Code continues to be a “hot topic.” The safe harbor is often invoked by shareholders to protect their “settlement payments” in a leveraged buyout (LBO).

Second Circuit: “Free and Clear” Section 363 Sale Order Does Not Enjoin Faulty Ignition Switch Claims Against General Motors

In 2009, General Motors (“Old GM”) commenced an historic chapter 11 case. With federal government backing, Old GM sold the bulk of its business and assets “free and clear” of liabilities to the new entity (“New GM”) predominantly owned by the U.S. Treasury, emerging from chapter 11 in just 40 days. In the contentious aftermath, courts have continued to grapple with issues arising from the case. On July 13, 2016, a Second Circuit panel reversed in part a decision by the U.S.

Business Reorganization June 2016

Business Reorganization May 2016

Business Reorganization March 2016

State Courts Re-Balance Fraudulent Transfer Litigation and Ponzi Scheme Presumptions

The basic elements and defenses for fraudulent-transfer claims have a certain elegant balance when combined (see the attached table below). For constructively fraudulent transfers by an insolvent transferor, a defendant who provides reasonably equivalent value will not be held liable. In the rare case of a fraudulent-but-solvent transferor, the transferee who acted in good faith and provided some value will not be held liable.

Bankruptcy Schedules: Reliable Information Provided Under Oath, Right? Maybe Not…

A debtor’s bankruptcy schedules of assets and liabilities (Schedules) and statement of financial affairs (SOFA) are filed early in a chapter 11 case and are supposed to contain an accurate and complete listing of all assets and liabilities, signed by a responsible party under oath. The Schedules and SOFA are often the first things to review when a case is filed, as they provide important information regarding the value of assets and whether identified claims are disputed.

Caesars Entertainment: The Seventh Circuit Expands the Reach of § 105

The “automatic stay” is one of the most fundamental debtor protections under the Bankruptcy Code. On rare occasions, courts have used their equitable powers under Bankruptcy Code § 105 to enjoin actions against nondebtors, usually arising from the same litigation plaguing the debtor. In late 2015, the Seventh Circuit Court of Appeals decided Caesars Entertainment Operating Co. v.

Taxing Legal Marijuana: A Hazy Issue for Municipalities Seeking Relief in Chapter 9

The past 25 years have marked a growing trend toward the legalization and decriminalization of marijuana. Twenty-three states have legalized the drug’s medical use, with four states and Washington, D.C., going a step further by permitting its recreational use for adults over the age of 21.

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