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Circuit Judge Who Axed J&J Bankruptcy Move Handed Biden a Vacancy

Submitted by ckanon@abi.org on
When Tom Ambro got a call from a friend in 1990 who mentioned “eleven-ten,” he thought it was a reference to the time rather than the section of the Bankruptcy Code that covers airplanes, Bloomberg Law reported. Ambro, then a transactional lawyer at Richards Layton & Finger in Wilmington, Del., agreed to represent aircraft financiers in Continental Airlines’ second bankruptcy. That case, which he later argued before the U.S. Court of Appeals for the Third Circuit, altered the trajectory of Ambro’s career, pivoting his focus to bankruptcy. He ultimately returned to the Third Circuit as a judge, where he is perhaps the foremost authority on bankruptcy law sitting on any federal appeals court. “He’s probably forgotten more bankruptcy than many circuit judges will hope to learn,” said Prof. Bruce Markell of Northwestern University. Ambro is still making a mark even after recently taking senior status, penning the decision that struck down a Johnson & Johnson subsidiary’s bankruptcy earlier this year. He may not have semi-retired at all if not for the election of Joe Biden, who had shepherded Ambro’s nomination through the Senate 20 years ago. By taking senior status, Ambro handed his friend a vacancy. “I think I owed it to my friend, who’s the president,” Ambro said during an interview. The decision to strike down the J&J subsidiary’s bankruptcy was a serious shakeup to a controversial legal strategy some corporations are using to resolve mass liability through bankruptcy. The subsidiary could not receive bankruptcy benefits because it was not in financial distress, Ambro wrote. “That opinion begins to curb some of the cleverness that parties are taking,” said Hon. Barbara Houser (ret.). She said she admired Ambro for walking a “very careful line,” although she said some wanted him to come down harder against the J&J maneuver. Ambro declined to comment on J&J because he may have to weigh in on the case again. J&J is back in bankruptcy court making a second, similar attempt at the maneuver. A judge is considering if this attempt should be dismissed, which could result in another appeal to the Third Circuit.

Texas Leads in Commercial Bankruptcy Filings in First Half of 2023

Submitted by jhartgen@abi.org on

U.S. Bankruptcy Courts in Texas attracted about 40% of the country’s commercial chapter 11 filings in the first six months of this year, solidifying the state’s lead as the most popular restructuring destination for failed companies, WSJ Pro Bankruptcy reported. As many as 848 of a total of 2,165 chapter 11 filings were made in the four bankruptcy courts in Texas in the first half of 2023, according to bankruptcy information provider Epiq. The states of New York and Delaware ranked second and third, Epiq said. Texas extended its lead in bankruptcy filings compared with the same period last year when the state accounted for 20% of total commercial bankruptcy filings, slightly higher than runner-up New York of 18%, Epiq data show. “What the large chapter 11 debtors want, more so than some of the smaller midmarket companies, is consistency in rulings, and that’s the one thing you’re getting out of Texas right now,” ABI President-Elect Christopher Ward of Polsinelli said during a filing trend webinar hosted by ABI and Epiq. Houston was the most popular among the four Texas courts, attracting some of the largest filings including KKR-owned Envision Healthcare in May and airplane-parts giant Incora in June.

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