Business Restructuring Review January/February 2019

The Year in Bankruptcy: 2018

A chronicle of business bankruptcy, financial, economic, and related developments during 2018.

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  • Notable Business Bankruptcy Rulings in 2018
  • From the Top in 2018
  • Legislative and Regulatory Developments of 2018
  • Notable Plan Confirmations and Exits From Bankruptcy in 2018
  • Highlights of 2018

No Comity Extended to Foreign Bankruptcy Without Chapter 15 Recognition

In Halo Creative & Design Ltd. v. Comptoir Des Indes Inc., 2018 WL 4742066 (N.D. Ill. Oct. 2, 2018), the court denied a motion for a stay of U.S. litigation in light of the pendency of the defendant's Canadian bankruptcy case because a U.S. bankruptcy court had not recognized the Canadian bankruptcy under chapter 15.

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Eleventh Circuit Expands "Subsequent New Value" Preference Defense to Cases Involving Paid-For New Value

In Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), 899 F.3d 1178 (11th Cir. 2018), the U.S. Court of Appeals for the Eleventh Circuit broadened the scope of section 547(c)(4) of the Bankruptcy Code's "subsequent new value" defense against preference actions by holding that the provision applies to all new value supplied by the creditor during the preference period and not merely to new value that remains unpaid on the bankruptcy petition date. In adopting this approach, the Eleventh Circuit joined the Fourth, Fifth, Eighth, and Ninth Circuits in applying a more expansive reading of section 547(c)(4).

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Fifth Circuit Doubles Down on Statutory Mootness Approach to Bankruptcy Sales

In Tanguy v. West (In re Davis), 2018 WL 4232063 (5th Cir. Sept. 5, 2018), the U.S. Court of Appeals for the Fifth Circuit revisited the circumstances under which section 363(m) of the Bankruptcy Code moots an appeal of a bankruptcy court's order approving a sale of assets. The Fifth Circuit reaffirmed its adherence to the majority rule on the issue, ruling that, absent evidence that the purchaser did not acquire the property in good faith, the challengers' failure to obtain a stay pending appeal moots any appeal of a sale order. The court also held that the challengers abandoned any argument that the appeal was not moot by failing to raise it before the bankruptcy court.

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New UNCITRAL Model Law on the Recognition and Enforcement of Insolvency-Related Judgments

On September 18, 2018, the United Nations Commission on International Trade Law published its final version of the new Model Law on the Recognition and Enforcement of Insolvency-Related Judgments. The new Model Law creates a framework for the recognition and enforcement of judgments in foreign bankruptcy and insolvency proceedings.

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For the third consecutive year, Jones Day topped The BTI Consulting Group's "Client Service A-Team" ranking, which identifies the top law firms for client service through a national survey of corporate counsel. Jones Day is the only law firm to earn "Best of the Best" in all 17 activities in the 18 years BTI has been publishing this report.

Crain's New York Businesshas named Corinne Ball (New York) to its second annual list of "Notable Women in Law." This recognition celebrates lawyers who have impacted New York City in major ways. It honors the achievements of the brightest and boldest legal minds—those with both distinguished careers and exceptional civic and philanthropic activities.

Juan Ferré (Madrid) was selected for inclusion in the 11th edition of The Best Lawyers in Spain for his work in Banking and Finance Law and Insolvency and Reorganization Law. Juan was also a recipient of the 2019 "Lawyer of the Year" award for his work in Insolvency and Reorganization Law in Madrid.

Scott J. Greenberg (New York)Michael J. Cohen (New York)Stacey L. Corr-Irvine (New York)Jeremy D. Evans (New York)David S. Torborg (Washington; Business & Tort Litigation), and C. Lee Wilson (New York; Business & Tort Litigation) are representing the term loan lenders of Checkout Holding Corp., a personalized digital media marketing company based in St. Petersburg, Florida, in connection with a prepackaged chapter 11 case that the company filed on December 12, 2018, in the U.S. Bankruptcy Court for the District of Delaware to eliminate $1.6 billion in debt by means of a debt-for-equity swap.

In The M&A Advisor's 13th Annual Turnaround Awards, Jones Day won the award for "Restructuring of the Year (Over $5B)" for the restructuring of Takata Corporation. Jones Day's team included Corinne Ball (New York)Dan T. Moss (Washington)Jane Rue Wittstein (New York), and Caitlin K. Cahow(Chicago).

Scott J. Greenberg (New York), Michael J. Cohen (New York), and Nicholas J. Morin (New York) are representing the term loan lenders of David's Bridal Inc., the nation's largest wedding retailer, in connection with a prepackaged chapter 11 case filed by the company on November 19, 2018, in the U.S. Bankruptcy Court for the District of Delaware to eliminate $434 million in debt by means of a debt-for-equity swap.

Dan T. Moss (Washington) was featured in the January 2019 issue of the American Bankruptcy Institute Journal as one of the ABI's "40 Under 40" honorees.

In The M&A Advisor's 13th Annual Turnaround Awards, Jones Day won the award for "Out-of-Court Restructuring of the Year (Over $100MM to $1B)" for the out-of-court restructuring of Tweddle Group, Inc. Jones Day's team included Scott J. Greenberg (New York)Peter S. Saba (New York), and Amanda A. Parra Criste (Miami).

Jones Day was recognized for the 2018 "Global Finance Deal of the Year" by The American Lawyer for Oi S.A.'s $20 billion restructuring. Jones Day's team included Corinne Ball (New York)Jasper Berkenbosch (Amsterdam)Sophie Beerepoot (Amsterdam)Erik Schuurs (Amsterdam)Louis K. Fisher (Washington; Issues & Appeals), and Caitlin K. Cahow (Chicago).

An article written by Peter S. Saba (New York) entitled "Fifth Circuit Adopts Flexible Approach to Collateral Valuation in Cramdown Chapter 11 Cases" was posted on the December 4, 2018, Harvard Law School Bankruptcy Roundtable.

An article written by Timothy W. Hoffmann (Chicago) and Mark G. Douglas (New York) entitled "Reports of the Demise of 'Gifting' Chapter 11 Plans Are An Exaggeration" appeared in the January 2019 edition of The Bankruptcy Strategist.

An article written by Mark A. Cody (Chicago) and Mark G. Douglas (New York) entitled "Shareholder Consent for Bankruptcy Filing" was posted on the December 14, 2018, Oxford Business Law Blog.

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