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Business Restructuring Review Vol. 23 No. 2 | March–April 2024

In This Issue:

Singapore International Commercial Court Issues First Decision on Recognition of Cross-Border Bankruptcy Cases under Model Law

Established in 2015 as a trusted neutral forum to meet increasing demand for effective transnational dispute resolution, the Singapore International Commercial Court (the "SICC") is a division of the General Division of the High Court and part of the Supreme Court of Singapore. On January 18, 2024, the SICC handed down its first insolvency-related ruling. In Re PT Garuda Indonesia (Persero) Tbk [2024] SGHC(I) 1, the SICC granted recognition in Singapore of an Indonesian debtor-airline's "suspension of payments" proceeding under Singapore's version of the UNCITRAL Model Law on Cross-Border Insolvency. The SICC also recognized and enforced the terms of a composition plan approved by creditors and confirmed by an Indonesian court. In so ruling, the SICC overruled objections to recognition interposed by disgruntled aircraft lessors asserting, among other things, that recognition of the Indonesian proceeding would violate Singapore's public policy because creditors were treated unfairly in the debtor's composition plan. [read more …] 

Texas Bankruptcy Court: Debtor's Non-Economic Rights Under LLC Agreement Are Estate Property Protected by Automatic Stay

In In re Envision Healthcare Corp., 655 B.R. 701 (Bankr. S.D. Tex. 2023), the U.S. Bankruptcy Court for the Southern District of Texas examined the extent to which non-bankruptcy law can modify or terminate the voting and managerial interests that a debtor holds in a limited liability company ("LLC"). The court held that such interests become property of the estate on the bankruptcy petition date. It also ruled that the non-debtor members of an LLC who acted postpetition to cancel the debtor's rights under an LLC agreement based on a state law purporting to terminate such rights upon a bankruptcy filing violated the automatic stay. Finally, the court denied a motion to compel arbitration of the dispute over the cancellation because the matter was with the court's "core" jurisdiction, and arbitration would run against the purposes of the Bankruptcy Code. [read more …]

Changes to Confirmed "Toggle" Chapter 11 Plan Required No Additional Disclosure and Voting Where Creditors' Rights Not Materially and Adversely Affected

The U.S. Bankruptcy Court for the Southern District of New York addressed the procedures governing post-confirmation modification of a chapter 11 plan in In re Celsius Network LLC, 656 B.R. 327 (Bankr. S.D.N.Y. 2023). In a case where the debtors' "toggle" chapter 11 plan expressly contemplated two alternative transactions, but the debtors proposed certain changes prior to the plan's implementation, the court held that even if the alterations qualified as a plan "modification," no additional disclosure or voting was necessary because the changes did not materially and adversely impact creditors. [read more …]

Third Circuit: Bankruptcy Court Lacks Discretion to Deny Examiner Appointment Motion in Large Chapter 11 Cases

In In re FTX Trading Ltd., 91 F.4th 148 (3d Cir. 2024), the U.S. Court of Appeals for the Third Circuit addressed as a matter of first impression whether the appointment of an examiner is mandatory in a chapter 11 case filed by a debtor with more than $5 million in liabilities. The Third Circuit reversed a bankruptcy court order denying a motion by the Office of the U.S. Trustee to appoint an examiner in a cryptocurrency chapter 11 case to investigate allegations of pre-bankruptcy manager misconduct even though the debtor's unsecured debt far exceeded the $5 million threshold. In so ruling, the Third Circuit joined the Sixth Circuit in concluding that the appointment of an examiner in such cases is mandatory and that the bankruptcy court's discretion is limited to defining the scope of the examiner's investigation. [read more …]

Adler: English Court of Appeal Overturns Restructuring Plan

On January 23, 2024, the Court of Appeal in England and Wales upheld a challenge launched by dissenting creditors to overturn the UK Restructuring Plan (the "RP") of the Adler Group previously approved by the High Court under Part 26A of the Companies Act 2006 (Strategic Value Capital Solutions Master Fund LP and others v AGPS BondCo PLC [2024] EWCA Civ 24). In his judgment concerning the first-ever appeal of an RP, Lord Justice Snowden creates important authority that helps to define the creative boundaries of RPs, including, in particular, the application of the pari passu principle. [read more …]

Keeping It in the Family: Bankruptcy Court Discusses Factors for Application of New Value Exception to Absolute Priority Rule

In In re Cleary Packaging, LLC, 2023 WL 8703920 (Bankr. D. Md. 2023), the U.S. Bankruptcy Court for the District of Maryland analyzed a "new value exception" to the absolute priority rule in denying confirmation of the debtor's proposed chapter 11 plan. A chapter 11 debtor proposed in its plan that its sole owner would retain 100% ownership of the debtor while contributing funds that would provide only a fractional distribution to creditors over a 60-month period. The court acknowledged the merit of the new value exception in certain situations, but held that the requirements of the exception were not satisfied in the case before it. [read more …]



Katie Higgins (Sydney) and Jessica Brycki (Sydney) were part of a team of Jones Day professionals representing Peabody Energy Corporation in connection with the establishment of a $320 million syndicated revolving credit facility with PNC Bank, National Association, as administrative agent. Peabody is the leading global pure-play coal company, serving power and steel customers in more than 25 countries on six continents. Its primary business is the mining, sale, and distribution of coal.

Roger Dobson (Sydney) was included in the "Hall of Fame" in the practice area "Restructuring & Insolvency" in the 2024 edition of The Legal 500 Asia Pacific

Juan Ferré (Madrid) was recognized in the practice area "Insolvency and Reorganization Law" in the 2024 edition of The Best Lawyers in Spain.

An article written by Dan T. Moss (Washington and New York) titled "The Year in Bankruptcy: 2023" was published on February 6, 2024, in Lexis Practical Guidance.

An article written by Corinne Ball (New York) titled "Creditor Remedies Prevail in Delaware" was published in the February 21, 2024, edition of the New York Law Journal.

An article written by Daniel J. Merrett (Atlanta) titled "New York Bankruptcy Court: Setoff and Unjust Enrichment Cannot Be Asserted as Affirmative Defenses in Bankruptcy Avoidance Litigation" was published on February 6, 2024, in Lexis Practical Guidance.

An article written by Caitlin K. Cahow (Atlanta and Chicago) titled "Second Circuit Adopts Transfer-by-Transfer Approach to Bankruptcy Code's Safe Harbor for Securities Contracts Payments" was published on February 6, 2024, in Lexis Practical Guidance.


Lawyer Spotlight: Dan B. Prieto

Dan Prieto, a partner in the Business Restructuring & Reorganization Practice in the Dallas Office, has represented high-profile companies in successful chapter 11 reorganizations, out-of-court restructurings, and distressed M&A transactions. 

In recent years, Dan has assisted clients in achieving permanent resolutions of mass tort liabilities, including asbestos and talc liabilities. Dan is currently representing LLT Management, an affiliate of Johnson & Johnson, to resolve its talc liability.  He has represented Bondex, Kaiser Aluminum, and USG Corporation in their respective section 524(g) chapter 11 reorganizations that fully resolved their asbestos liabilities; and RadioShack in its successful chapter 11 reorganization and a going concern sale of a substantial portion of its business. Dan also played a lead role in representing the owners of the Vogtle nuclear plant in connection with Westinghouse's chapter 11 case and a guarantee provided by Toshiba and Hanson Permanente Cement and Kaiser Gypsum in chapter 11 cases they filed to resolve their asbestos and environmental liabilities. 

He has been recognized by The Best Lawyers in America, as a "Rising Star" by Texas Monthly, as an "Outstanding Young Restructuring Lawyer" by Turnarounds & Workouts, and among the "Best Lawyers in Dallas" by D Magazine.

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