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The Third Circuit opinion by Thomas Ambro explained that the ‘close nexus’ test does not apply when a post-conformation dispute is ‘core’ or entails enforcing a court order.
On Feb. 1, 2022, Hon. David S. Jones of the U.S. Bankruptcy Court for the Southern District of New York denied a motion to dismiss the chapter 11 cases of JPA No. 111 Co. Ltd. and JPA No. 49 Co. Ltd. (together, the “debtors”), each a Japanese single-purpose entity — finding that the debtors’ reversionary interest in unused retainer funds held by the debtors’ chapter 11 counsel established sufficient “ties” to the U.S. for purposes of chapter 11 eligibility under § 109 of the Bankruptcy Code [1].
Adhering to the categorial prohibition of nondebtor third-party releases, the Fifth Circuit now allows a workaround to protect principal participants in chapter 11 cases.
The Fifth Circuit said in dicta that courts might apply the ‘functional approach’ rather than the Countryman test in deciding whether a triangular contract is executory.
The Tenth Circuit is the first appeals court to rule on remedy after the Supreme Court said that the 2018 increase in U.S. Trustee fees was unconstitutional.
