Business Restructuring Review
In this issue:
- New Section 1104(e) May Not Be a Ticking Time Bomb After All
In a matter of first impression, a New York bankruptcy court ruled that the U.S. Trustee’s duty to seek the appointment of a trustee under new section 1104(e) has no bearing on the standard applied to determine whether a trustee is warranted.
- IP Perspective: Actual Test and Footstar Approach Govern DIP’s Ability to Assume Patent and Technology License
A New Mexico bankruptcy court ruled that the “actual test” and the Footstar approach govern whether a chapter 11 debtor licensee may assume a patent and technology license agreement.
- Creditors’ Committee Lacks Standing to Seek Equitable Subordination
The Second Circuit ruled that a creditors’ committee can sue to equitably subordinate a claim only if it obtains court authority under the doctrine of “derivative standing.”
- Another Circuit Considers the “Aggregate Approach” in Applying the “Reorganization Test” to Distress Terminations of Multiple Pension Plans in Chapter 11
The Eighth Circuit ruled that it need not decide whether the “reorganization test” requires a plan-by-plan or aggregate analysis because the bankruptcy court concluded that the debtor could not survive outside of chapter 11 without an investment conditioned on termination of all three of its pension plans.
- Release of Chapter 11 Plan Proponent Overbroad and Impermissible
The First Circuit bankruptcy appellate panel ruled that a release provision in a chapter 11 plan that insulated the plan proponent from a breach of its obligations to implement the plan was overbroad.
- Bankruptcy Rule Changes Take Effect