Business Restructuring Review | May–July 2023 | Vol. 22 No. 3

In This Issue:

U.S. Supreme Court Rules that Bankruptcy Code's Protection of Unstayed Asset Sale Orders to Good-Faith Purchasers Is Not Jurisdictional

On April 19, 2023, the U.S. Supreme Court ruled in MOAC Mall Holdings LLC v. Transform Holdco LLC, 143 S. Ct. 927, 2023 WL 2992693 (2023), that section 363(m) of the Bankruptcy Code, which provides that bankruptcy court orders authorizing a sale or lease of estate property to a good-faith purchaser or lessee cannot be disturbed on appeal in the absence of a stay pending appeal, is not jurisdictional. In ruling that an appeal of a 2019 bankruptcy court order approving the assignment of a lease agreement between Sears, Roebuck & Co. ("Sears") and MOAC Mall Holdings LLC, as part of Sears's sale of substantially all of its assets was not barred by section 363(m), the Court settled a long-running dispute among bankruptcy and appellate courts (including a circuit split) on the issue. [read more …]

New York Bankruptcy Court Breaks from Precedent in Ruling that "Time Approach" Should Be Used to Calculate Landlord's Claim for Lease Termination Damages

In In re Cortlandt Liquidating LLC, 648 B.R. 137 (Bankr. S.D.N.Y. 2023), the U.S. Bankruptcy Court for the Southern District of New York considered whether the "Time Approach" or the "Rent Approach" should be employed to calculate the maximum amount of a landlord's claim resulting from the termination of a real property lease in bankruptcy. The court held that, based on the plain language of the Bankruptcy Code, its legislative history, and other recent rulings considering the question, the Time Approach represented "the correct view." In so ruling, the bankruptcy court departed from previous bankruptcy court rulings in the same district applying the Rent Approach. [read more …]

Massachusetts Bankruptcy Court Adopts "Per Plan" Approach to Impaired Class Acceptance Requirement for Confirmation of Joint Chapter 11 Plan

In In re NESV ICE, LLC, 2023 WL 2278603 (Bankr. D. Mass. Feb. 28, 2023), the U.S. Bankruptcy Court for the District of Massachusetts adopted the "per plan" approach, as distinguished from the "per debtor" approach, in determining whether the Bankruptcy Code's requirement that at least one impaired class of creditors accept a cram-down plan before it can be confirmed. In the case, a chapter 11 plan provided that related debtors were deemed to be substantively consolidated but would remain separate after confirmation of a joint chapter 11 plan. The court also held that a junior secured creditor would not be deprived of its right to vote on the plan in accordance with a chapter 11 plan voting rights assignment in a prepetition subordination agreement. [read more …] 

Texas District Court: Equitable Mootness Doctrine Does Not Preclude Appellate Review of Chapter 11 Plan Exculpation Clause

In Bouchard v. Bouchard Transportation Co. (In re Bouchard Transportation Co.), 2023 WL 1797907 (S.D. Tex. Feb. 7, 2023), the U.S. District Court for the Southern District of Texas reversed and remanded a bankruptcy court order confirming a chapter 11 plan that included an overbroad exculpation provision, even though the order was not stayed pending appeal, the plan had been substantially consummated, and the plan included a nonseverability provision precluding removal or modification of the exculpation provision. Based on Fifth Circuit precedent, the district court held that, to safeguard the integrity of the chapter 11 process, the doctrine of equitable mootness cannot bar appellate review of an order affirming a plan that contains an impermissibly broad exculpation provision. [read more …] 

Chapter 15 Recognition Order and Relief Could Be Modified After Conversion of Foreign Debtor's Reorganization to Liquidation

In In re Comair Ltd., 2023 WL 1971618 (Bankr. S.D.N.Y. Feb. 12, 2023), a debtor's South African "rescue proceeding" was converted to a liquidation and the debtor's "rescue practitioners" were replaced with provisional liquidators. The liquidators then petitioned a U.S. bankruptcy court that had previously recognized the rescue proceeding under chapter 15 to amend the recognition order to recognize the liquidation, and to substitute them as the debtor's foreign representatives. The bankruptcy court granted the motion, ruling that: (i) no new chapter 15 case was necessary because the liquidation and the terminated rescue proceeding were "parts of one foreign proceeding" for purposes of chapter 15; and (ii) the provisional liquidators could be substituted for the rescue practitioners as the debtor's foreign representatives in the chapter 15 case. [read more …]

Fifth Circuit: Barton Doctrine Precluded Litigation by Chapter 7 Debtor Against Bankruptcy Trustee and Counsel

In Matter of Foster, 2023 WL 20872 (5th Cir. Jan. 3, 2023), the U.S. Court of Appeals for the Fifth Circuit, albeit in a nonprecedential opinion, affirmed lower court rulings dismissing litigation brought by an individual debtor against the chapter 7 trustee and her lawyers without the bankruptcy court's permission. According to the Fifth Circuit (and the lower courts), all of the actions complained of by the debtor were performed in furtherance of the defendants' statutory or court-approved duties. In so ruling, the Fifth Circuit distanced itself from certain other courts that have concluded that the qualified immunity from suit expires under the "Barton doctrine" when a bankruptcy case has been closed. [read more …]

Lawyer Spotlight

Meet Corinne Ball

With 40 years' restructuring and distressed investing experience, Corinne Ball co-leads the New York Office's Business Restructuring & Reorganization Practice and leads the Firm's European Distress Investing and Alternative Capital Initiatives. Her practice focuses on complex corporate reorganizations and distressed acquisitions, including matters involving multijurisdictional and cross-border enterprises.

Corinne worked extensively on the City of Detroit restructuring, and she led a team of lawyers representing Chrysler in its successful chapter 11 reorganization. She also led a team of attorneys in the restructuring of FGIC and the sale of its portfolio to MBIA; represented PAG in its equity investment, enabling Key Safety System to acquire Takata out of Chapter 11; and led the successful restructuring of Dana Corp., which emerged from bankruptcy in 2008. She has orchestrated many other reorganizations. She also leads the Firm's distressed M&A efforts and is the featured "Distress M&A" columnist for the New York Law Journal.

Corinne has been recognized annually as a leader in the restructuring field by Chambers Global and Chambers USA (band one), K&A Restructuring Register, Legal 500, and others. She was named a "Global Elite" Thought Leader for 2023 by Who's Who Legal. She won The National Law Journal's "Most Influential Lawyer of the Decade in Bankruptcy & Restructuring" and Turnaround Management Association's "International Turnaround Company of the Year" award, and she was named "Dealmaker of the Year" by American Lawyer. In 2020, Corinne received the Lifetime Achievement Award from the New York Law Journal.

A trustee of Catholic Charities of New York, Corinne also leads many of the diocesan representations. She is a former director of both the American Bankruptcy Institute and the American College of Bankruptcy and a member of the International Insolvency Institute. She also serves on the magistrate judge selection panel for the Southern District of New York, and the Business Advisory Committee for the Bankruptcy Court of the Southern District of New York.


Jones Day received the JD Supra Reader's Choice Award in the practice area of Bankruptcy for 2023.

Bruce Bennett (Los Angeles and New York) received a Band 1 Ranking in the field of Bankruptcy/Restructuring in the 2023 edition of Chambers Global: The World's Leading Lawyers for Business.

Lawyers of Color named Kevyn D. Orr (Washington), Partner-in-Charge of Jones Day's U.S. Offices, to its 2023 Power List. The annual Power List recognizes the most influential minority attorneys and allies in the United States.

Fabienne Beuzit (Paris) was designated a "Leading Individual" in the practice area of Insolvency in the 2023 edition of The Legal 500 EMEA.

Roger Dobson (Sydney) and Katie Higgins (Sydney) were recognized in the practice area of Insolvency and Reorganisation Law in the 2024 edition of Best Lawyers in Australia

Juan Ferré (Madrid) was designated a "Leading Individual" in the practice area of Restructuring and Insolvency in the 2023 edition of The Legal 500 EMEA.

Amanda P. Johnson (Chicago) was one of three Jones Day associates selected for two different Leadership Council on Legal Diversity programs. The Leadership Council on Legal Diversity is an organization of more than 400 corporate chief legal officers and law firm managing partners who have pledged themselves to creating a truly diverse U.S. legal profession. 

Roger Dobson (Sydney) was named to the Hall of Fame in the 2023 edition of The Legal 500 Asia Pacific guide in the practice area "Australia Restructuring and Insolvency."

Fabienne Beuzit (Paris) was recognized in the field of Restructuring/Insolvency in Chambers Europe 2023. 

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 "Chapter 15 Recognition Limited to Foreign Insolvency, Liquidation or Restructuring Proceedings" was published on March 15, 2023, in Lexis Practical Guidance.

An article written by Dan B. Prieto (Dallas) and Mark G. Douglas (New York) titled "Second Circuit Weighs in on Bankruptcy Code v. Chapter 11 Plan Impairment and the Solvent-Debtor Exception" was published on March 15, 2023, in Lexis Practical Guidance.

On March 24, 2023, the American Bar Association published its "Inaugural Survey of Chapter 15 of the Bankruptcy Code" written by Dan T. Moss (Washington), Corinne Ball (New York), Ben Rosenblum (New York), Jasper Berkenbosch (Amsterdam), Erik Schuurs (Amsterdam), Sushma Jobanputra (Singapore), Vinay Kurien (Singapore), and Zachary Sharpe (Singapore).

An article written by Corinne Ball (New York) titled "Fifth Circuit Recognizes Finality of Bankruptcy Sale Orders" was published in the April 25, 2023, edition of the New York Law Journal.

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