Business Restructuring Review | Vol. 21 No. 1 | January–February 2022

In This Issue:

The Year In Bankruptcy: 2021

A brief chronicle of the year's notable developments in corporate bankruptcy and restructuring, including business bankruptcy filings, significant court rulings, and bankruptcy legislation. [read more …]

Delaware District Court Holds Rejection Eliminates Non-Debtor's Exclusive Right to Provide Services to the Debtor

In Caliber North Dakota, LLC v. Nine Point Energy Holdings, Inc. (In re Nine Point Energy Holdings, Inc.), 2021 WL 3269210 (D. Del. July 30, 2021), the U.S. District Court for the District of Delaware held that the U.S. Supreme Court's decision in Mission Product Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652 (2019), did not apply to preserve a non-debtor contract party's exclusive right to provide midstream services to the debtor after the debtor rejected the contract in bankruptcy. The case is an important clarification on the implications of Mission Product as it confirms that creative contracting cannot prevent a debtor from exercising, and receiving the benefits of, its rejection rights under the Bankruptcy Code. [read more …]

The Eleventh Circuit Revisits the Doctrine of Statutory Mootness in Bankruptcy Sales

In Reynolds v. ServisFirst Bank (In re Stanford), 17 F.4th 116 (11th Cir. 2021), two of the three judges on a panel of the U.S. Court of Appeals for the Eleventh Circuit ruled that an unstayed order approving a sale to a good-faith purchaser is moot on appeal, even if the sale was not properly authorized under the Bankruptcy Code. A concurring judge reached the same result, but for a different reason, because he determined that the debtors were precluded from challenging a sale that they had requested. [read more …]

Florida Bankruptcy Court Rules that Foreign Debtor Need Not Have U.S. Residence, Assets, or Place of Business to Be Eligible for Chapter 15 Recognition

In In re Talal Qais Abdulmunem al Zawawi, 2021 WL 3890597 (Bankr. M.D. Fla. Aug. 31, 2021), the U.S. Bankruptcy Court for the Middle District of Florida distanced itself from a 2013 decision by the U.S. Court of Appeals for the Second Circuit, concluding that, like debtors in cases under other chapters of the Bankruptcy Code, a chapter 15 debtor must reside or have assets or a place of business in the United States to be eligible for chapter 15 relief. According to the bankruptcy court, chapter 15 has its own eligibility requirements, and the eligibility requirements for debtors in cases under other chapters of the Bankruptcy Code do not apply in chapter 15 cases. [read more …]

Another New York District Court Widens the Bankruptcy Code's Securities Contract Safe Harbor

In Holliday, Liquidating Trustee of the BosGen Liq. Trust v. Credit Suisse Secs. (USA) LLC, 2021 WL 4150523 (S.D.N.Y. Sept. 13, 2021), appeal filed, No. 21-2543 (2d Cir. Oct. 8, 2021), the U.S. District Court for the Southern District of New York affirmed a bankruptcy court ruling that: (i) section 546(e) preempts intentional fraudulent transfer claims under state law because the intentional fraud exception expressly included in section 546(e) provision applies only to intentional fraudulent transfer claims under federal law; and (ii) payments made to the members of limited liability company debtors as part of a prebankruptcy recapitalization transaction were protected from avoidance under section 546(e) because for that section's purposes the debtors were "financial institutions," as customers of banks that acted as their depositories and agents in connection with the transaction. [read more …]

Florida Bankruptcy Court Defers to Brazilian Court in Dismissing Chapter 15 Adversary Proceeding

In In re Varig Logistica S.A., 2021 WL 5045684 (Bankr. S.D. Fla. Oct. 29, 2021), the U.S. Bankruptcy Court for the Southern District of Florida court dismissed an adversary proceeding commenced in the chapter 15 case of a bankrupt Brazilian air carrier due to the pendency of litigation involving the same issues in a Brazilian court. As a matter of comity, the U.S. bankruptcy court determined that the Brazilian court was better suited to adjudicate whether claims asserted by the chapter 15 debtor's foreign representative were barred by releases granted by the debtor prior to the commencement of its Brazilian and U.S. bankruptcy cases. [read more …]

Delaware Bankruptcy Court: No Implied Assumption of Executory Contracts in Bankruptcy

The ability of a bankruptcy trustee or chapter 11 debtor-in-possession to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a "fresh start" for debtors and to maximize the value of the bankruptcy estate for the benefit of all stakeholders. However, the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure establish strict requirements for the assumption, rejection, and assignment of contracts and leases. The U.S. Bankruptcy Court for the District of Delaware addressed the consequences of failing to comply with those requirements in In re Dura Auto. Sys., LLC, 628 B.R. 750 (Bankr. D. Del. 2021). The court confirmed that the U.S. Court of Appeals for the Third Circuit—like the majority of other courts that have decided the issue—has rejected the doctrine of "implied assumption" of executory contracts in bankruptcy cases. [read more …]


Heather Lennox (Cleveland and New York) has been appointed Global Practice Leader of Jones Day's Business Restructuring & Reorganization Practice. Heather has been a partner in the Firm's BRR Practice since 2002 and has led some of the most important restructuring cases in the United States over the past two decades, including work on behalf of the City of Detroit, Peabody Energy, Hostess Brands, and FTD. She is a member of the National Bankruptcy Conference, which advises Congress on national bankruptcy policy, and a Fellow in the American College of Bankruptcy. She has served as Partner-in-Charge of the Firm's Cleveland Office since 2016. She succeeds Bruce Bennett (Los Angeles and New York), who has led Jones Day's BRR Practice since 2016, and will continue to advise clients as a partner in the practice. 

Jones Day recently welcomed Oliver S. Zeltner (Cleveland) and T. Daniel Reynolds (Cleveland) to the partnership in its Business Restructuring & Reorganization Practice.

An article written by Corinne Ball (New York) titled "District Court Rejects Non-Consensual Third-Party Releases in Purdue Pharma Plan; While Plaintiffs Return to the Race to the Courthouse, Distress Investors Will Reap Opportunities" was published in the December 22, 2021, edition of the New York Law Journal.

Roger Dobson (Sydney) received a Band 1 ranking in the field of Restructuring/Insolvency in the 2022 edition of Chambers Asia-Pacific

Colleen E. Laduzinski (Tax; Boston) has been appointed as a Conferee to the National Bankruptcy Conference, a select group of nationally known practitioners, academics, and judges that is often called upon to advise Congress and the Executive Branch agencies on bankruptcy policy matters.

Juan Ferré (Madrid) was recognized in the 2022 edition of The Best Lawyers in Spain™ in the practice area "Banking and Finance Law; Insolvency and Reorganization Law."

An article written by Charles M. Oellermann (Columbus) and Mark G. Douglas (New York) titled "Case Update: Second Circuit Breathes New Life Into Madoff Trustee's Efforts to Recover Ponzi Scheme Payments" was published in the December 2021 issue of Wall Street Lawyer.

An article written by Mark A. Cody (Chicago) and Mark G. Douglas (New York) titled "Another Bankruptcy Court Joins the Debate on the Validity of Bankruptcy Blocking Restrictions" was published on October 25, 2021, in Lexis Practical Guidance.

An article written by Paul M. Green (Houston) and Mark G. Douglas (New York) titled "Another Bankruptcy Court Rules the Solvent Debtor Exception Survived Enactment of the Bankruptcy Code" was published on October 26, 2021, in Lexis Practical Guidance.

An article written by Dan T. Moss (Washington), Taylre C. Janak, and Mark G. Douglas (New York) titled "An Equitable Tightrope: Blackjewel's Balancing Act on After-Acquired Property in Bankruptcy" was published on October 27, 2021, in Lexis Practical Guidance.

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 "New York Bankruptcy Court Rules that Good Faith Is Not the Gatekeeper to Chapter 15" appeared in the December 2021 INSOL News Update.

Kevyn D. Orr (Washington), Corinne Ball (New York), Bruce Bennett (New York and Los Angeles), Carl E. Black (Cleveland), Jeffrey B. Ellman (Atlanta), Brad B. Erens (Chicago), Gregory M. Gordon (Dallas), Heather Lennox (Cleveland), Joshua M. Mester (Los Angeles), and Charles M. Oellermann (Columbus) were featured in the practice area "Business Restructuring & Reorganization" or "Bankruptcy & Financial Restructuring" in the 2022 Lawdragon 500 Leading Bankruptcy & Restructuring Lawyers.

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