Business Restructuring Review | Vol. 20 No. 5 | September–October 2021

In This Issue:

Secured Lender's Credit Bid Right in Bankruptcy Sale Denied

In In re Figueroa Mountain Brewing, LLC, 2021 WL 2787880 (Bankr. C.D. Cal. July 2, 2021), the court denied a secured lender the right to credit bid its disputed claim in a bankruptcy sale of its collateral based on colorable allegations that, among other things, its loan agreement and all payments made by the debtor under it were fraudulent transfers and the lender had dominated and controlled the debtor in an effort to take control of its assets. [read more … ]

Structured Dismissal of Chapter 11 Cases Did Not Violate Jevic

In In re KG Winddown, LLC, 628 B.R. 739 (Bankr. S.D.N.Y. 2021), the U.S. Bankruptcy Court for the Southern District of New York held that a 2017 U.S. Supreme Court ruling—that the Bankruptcy Code does not allow courts to approve distributions to creditors in a "structured dismissal" of a chapter 11 case that violate the Bankruptcy Code's ordinary priority rules without the consent of creditors—"left the door open where such dismissals do not violate the absolute priority rule and otherwise comply with the applicable provisions of the Bankruptcy Code…. [and] [h]ere, the Debtors' request for structured dismissals fits neatly through that open door." [read more … ]

"Work-for-Hire" Film Production Agreement Not Executory Contract in Bankruptcy Due to Lack of Mutual Continuing Material Obligations

In Spyglass Media Group, LLC v. Bruce Cohen Productions (In re Weinstein Company Holdings LLC), 997 F.3d 497 (3d Cir. 2021), the U.S. Court of Appeals for the Third Circuit affirmed lower-court rulings holding that a "work-made-for-hire" contract between a film company and the producer of a motion picture was not an executory contract because the producer lacked any remaining "material obligations." In so ruling, the court noted that the parties to a contract can override the Bankruptcy Code's intended protections for a debtor in connection with certain contracts, but only by clearly and unambiguously providing that continuing obligations are material in the text of the agreement and thereby ensuring as much as possible that the contract will be deemed executory. [read more … ]

Stalking Horse Bidder May Be Entitled to Administrative Priority for Expenses Despite Failure to Close Bankruptcy Sale

In In re Energy Future Holdings Corp., 990 F.3d 728 (3rd Cir. 2021), the U.S. Court of Appeals for the Third Circuit ruled that even though a "stalking horse" bidder failed to obtain necessary regulatory approvals to close an anticipated bankruptcy asset sale, the bidder may receive an administrative claim for a break-up fee and expenses if it can demonstrate that its efforts provided value to the estate. [read more … ]

N.Y. District Court Rules that Chapter 15 Recognition Not Required to Enforce Foreign Bankruptcy Injunction

In Moyal v. Munsterland Gruppe GmbH & Co., 2021 WL 1963899 (S.D.N.Y. May 17, 2021), the U.S. District Court for the Southern District of New York dismissed litigation against a German company, finding that, under principles of comity, the lawsuit was stayed by operation of German law when the company filed for bankruptcy in Germany, even though a U.S. bankruptcy court had not entered an order recognizing the German bankruptcy proceeding under chapter 15 of the Bankruptcy Code. [read more … ]

Second Circuit Applies Taggart Standard to Orders Declaring Home Mortgage Loans Current

In a decision that may have significant ramifications in bankruptcy cases, a divided panel of the U.S. Court of Appeals for the Second Circuit ruled in PHH Mortgage Corp. v. Sensenich (In re Gravel), 2021 WL 3277211 (2d Cir. Aug. 2, 2021), that the standard articulated by the U.S. Supreme Court in Taggart v. Lorenzen, 139 S. Ct. 1795 (2019), for the imposition of contempt sanctions due to a violation of the bankruptcy discharge injunction also applied to contempt sanctions imposed for repeated violations of bankruptcy court orders declaring a home mortgage current. [read more … ]

U.S. Supreme Court Update: Petitions Seek Review of Notable Bankruptcy Law Rulings

At a conference to be held at the end of the summer recess on September 27, 2021, the U.S. Supreme Court will consider whether to grant petitions seeking review during the new Term that begins on October 4 of three notable appeals involving issues of bankruptcy law. Two of those appeals address the doctrine of "equitable mootness." The third concerns federal preemption of a non-debtor third party's tortious interference claims against other non-debtor third parties. [read more … ]


In July 2021, Jones Day was given a "Most Recommended" law firm status by BTI Consulting Group for the 19th consecutive year. The honor is based on unprompted responses from in-depth interviews with more than 350 top legal decision-makers conducted by BTI Consulting Group for its annual survey, "The Firms Top Legal Decision Makers Recommend Above All Others."

The National Law Journal ("NLJ") recognized Kevyn D. Orr (Washington) by including him in its list of Crisis Trailblazers for 2021. Through the various Trailblazers special supplements, the NLJ recognizes agents of change—movers and shakers in the legal industry who have made significant contributions to, and innovations in, their area of practice.

Thomas A. Wilson (Cleveland), Jeffrey B. Ellman (Atlanta), Kevyn D. Orr (Washington), Thomas M. Wearsch (Cleveland), Caitlin K. Cahow (Chicago), Anna Kordas (New York), Oliver S. Zeltner (Cleveland), James O. Johnston (Los Angeles), Aldo L. LaFiandra (Atlanta and New York), Heather Lennox (Cleveland and New York), T. Daniel Reynolds (Cleveland), Gregory M. Gordon (Dallas), Corinne Ball (New York), Carl E. Black (Cleveland), Bruce Bennett (Los Angeles and New York), and Brad B. Erens (Chicago) were recognized in The Best Lawyers in America (2022) in the fields of Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law and/or Litigation—Bankruptcy.

Fabienne Beuzit (Paris), Isabelle Maury (Paris), and Rodolphe Carrière (Paris) were recognized in the 2022 edition of The Best Lawyers in France™/Les Echos in the practice area Insolvency and Reorganization Law.

Michèle Grégoire (Brussels; Financial Markets and Global Disputes) was recognized in the 2022 edition of The Best Lawyers in Belgium™ in the practice area Insolvency and Reorganization Law.

An article written by Daniel J. Merrett (Atlanta) and Mark G. Douglas (New York) titled "Another Bankruptcy Court Adopts Majority View in Approving Bankruptcy Trustee's Use of Tax Code Look-Back Period in Avoidance Actions" was published in AIRA Journal Vol. 34 No. 3 (2021).

An article written by Corinne Ball (New York), Dan T. Moss (Washington), and Michael C. Schneidereit (New York) titled "Bankruptcy Ruling Highlights Growing Use of Chapter 15" was published on Law360 on July 27, 2021. The article was prepared with the assistance of Isel M. Perez (Miami) and Mark G. Douglas (New York).

An article written by Corinne Ball (New York), Dan T. Moss (Washington), Michael C. Schneidereit (New York), Isel M. Perez (Miami), and Mark G. Douglas (New York) titled "Illinois Bankruptcy Court Examines Statutory Authority For Enforcing Foreign Bankruptcy Court Orders in Chapter 15 Cases" was published in the September 2021 INSOL News Update.

An article written by Corinne Ball (New York) titled "Fifth Circuit Sends Clear Message that Bankruptcy Sales Are Final" was published in the August 25, 2021, issue of the New York Law Journal.

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