Business Restructuring Review | May–June 2020
In This Issue:
Mothballing Bankruptcy Cases in the COVID-19 Crisis
Because of the severe impact of the COVID-19 crisis on nonessential businesses forced to close and terminate employees after filing for chapter 11 protection, bankruptcy courts have been confronted with requests by debtors to temporarily suspend their cases, using the courts' equitable powers and a seldom invoked provision of the Bankruptcy Code: 11 U.S.C. § 305(a). The courts presiding over the chapter 11 cases of Modell's Sporting Goods, restaurant and brewpub chain CraftWorks, and home-furnishing retailer Pier 1 Imports recently entered orders temporarily mothballing the debtors' bankruptcy cases in an effort to weather the COVID-19 storm and, hopefully, preserve value for all creditors. [read more . . .]
Post-Taggart, Ninth Circuit BAP Holds That "No Fair Ground of Doubt" Standard Applies to Automatic Stay Violations
In Suh v. Anderson (In re Jeong), 2020 WL 1277575 (B.A.P. 9th Cir. Mar. 16, 2020), a Ninth Circuit Bankruptcy Appellate Panel held in a nonprecedential decision that the "no fair ground of doubt" standard for bankruptcy discharge order violations articulated in Taggart v. Lorenzen, 139 S. Ct. 1795 (June 3, 2019), applies to a chapter 7 trustee's request for contempt sanctions for a violation of the automatic stay. [read more . . .]
Use of Cash Collateral to Pay Prepetition Debt Not Prohibited by Jevic
In In re Claar Cellars, LLC, 2020 WL 1238924 (Bankr. E.D. Wash. Mar. 13, 2020), the U.S. Bankruptcy Court for the Eastern District of Washington authorized a debtor to use cash collateral over the objection of a secured creditor because it found that the creditor's interest in the collateral was adequately protected. Moreover, the court concluded that the use of such collateral to pay in part a prepetition, allegedly secured debt owed to an affiliated debtor did not violate the U.S. Supreme Court's prohibition in Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973 (2017), against distributions that deviate from the Bankruptcy Code's priority scheme in the context of a "structured dismissal" of a chapter 11 case. [read more . . .]
From the Top in Brief
The U.S. Supreme Court recently handed down three rulings potentially impacting bankruptcy cases. The decisions addressed nunc pro tunc relief, property of the bankruptcy estate, and state sovereign immunity. [read more . . .]
Legislative Update
A brief summary of the bankruptcy-related provisions in the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act and proposed amendments to the Commodity Futures Trading Commission Bankruptcy Rules. [read more . . .]
Newsworthy:
Jones Day ranks No. 1 in the Acritas US Law Firm Brand Index 2020, a report ranking the top law-firm brands in the United States. This is the ninth year of the Index and the fourth consecutive year the Firm earned the top spot. Jones Day is the only law firm to retain its position in the Index from last year.
Lucas Wilk (Perth), Roger Dobson (Sydney), Katie Higgins (Sydney), and Tim L'Estrange (Melbourne and Sydney) were recognized in the 2021 edition of The Best LawyersTM in Australia in the field of Insolvency & Reorganization Law.
Heather Lennox (Cleveland and New York), Kevyn D. Orr (Washington), Carl E. Black (Cleveland), Robert W. Hamilton (Columbus), Thomas M. Wearsch (Cleveland), James O. Johnston (Los Angeles), Brad B. Erens (Chicago), Jeffrey B. Ellman (Atlanta), Corinne Ball (New York), Bruce Bennett (Los Angeles and New York), Charles M. Oellermann (Columbus), and Gregory M. Gordon (Dallas) were recognized in the area of Bankruptcy/Restructuring in Chambers USA 2020.
Heather Lennox (Cleveland and New York) was named a "Star Individual" in the area of Bankruptcy/Restructuring in Chambers USA 2020.
Fabienne Beuzit (Paris), Elodie Fabre (Paris), Dr. Olaf Benning (Frankfurt), Jasper Berkenbosch (Amsterdam), Erik Schuurs (Amsterdam), and Juan Ferré (Madrid) were recognized in the field of Insolvency and Restructuring in The Legal 500 EMEA 2020.
Corinne Ball (New York) was among the "Senior Statespeople" recognized by Chambers USA 2020 in the field of Bankruptcy/Restructuring.
An article written by Carl E. Black (Cleveland), Mark J. Andreini (Cleveland; Insurance Recovery; Business & Tort Litigation), and Jonathan Noble Edel (Cleveland) entitled "Creditors at the Gate: How Good Are Your Indemnities and D&O Insurance?" will be published in the June 2020 edition of Pratt's Journal of Bankruptcy Law.
An article written by Corinne Ball (New York) entitled "Empire Generating: Majority Lender Is Poised To Control Outcome Using Credit Bid" appeared in the April 22, 2020, issue of the New York Law Journal.
