Business Restructuring Review Vol. 25 No. 2 | March-April 2026
In This Issue:
New York Bankruptcy Court Approves Insider DIP Litigation Financing
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession to obtain financing may be crucial to the success of a chapter 11 case as a means of funding operations or distributions under a plan of reorganization. Such financing may also be necessary and appropriate to finance litigation that can generate value for the bankruptcy estate, even if the financing is provided by corporate "insiders" of the debtor and must therefore be subjected to heightened scrutiny. In In re SPAC Recovery Co., No. 25-12109 (JPM), 2026 WL 18778 (Bankr. S.D.N.Y. Jan. 2, 2026), the U.S. Bankruptcy Court for the Southern District of New York authorized a debtor whose sole asset was litigation claims to borrow money from insiders on a "priming lien" basis to fund the litigation, concluding that the loan was both necessary, beneficial to the estate, and fair. [read more …]
New York District Court Affirms Narrow Scope of "Public Policy Exception" in Chapter 15 Cases
In In re Canterbury Securities, Ltd., 675 B.R. 109 (S.D.N.Y. 2025), appeal filed, No. 25-3200 (2d Cir. Dec. 23, 2025), the U.S. District Court for the Southern District of New York affirmed a bankruptcy court's denial of a motion to dismiss a chapter 15 petition and terminate related relief based upon allegations by a foreign debtor's principal that the debtor's Cayman Islands liquidation proceeding was commenced to further massive fraud and securities law violations. According to the district court, those allegations were both unsupported and not a basis for denying chapter 15 relief under the "public policy" exception to chapter 15 relief. [read more …]
Statutory Cap on Lease Rejection Damage Claims in Bankruptcy Applies to Solvent Debtors
To prevent landlords under long-term real property leases from reaping a windfall for future rent claims at the expense of other creditors, the Bankruptcy Code caps the amount of a landlord's claim against a debtor-tenant for damages "resulting from the termination" of a real property lease. In In re Chrome Holding Co. (f/k/a 23andMe Holding Co.), No. 25-40976-357, 2025 WL 3301036 (Bankr. E.D. Mo. Nov. 26, 2025), the U.S. Bankruptcy Court for the Eastern District of Missouri addressed a challenge to the legitimacy of the statutory cap in cases where the debtor is solvent and able to pay creditors in full. The court overruled a landlord's objections to confirmation of a chapter 11 plan that capped the landlord's lease rejection damages claim while providing for a distribution to shareholders. Consistent with the almost unanimous consensus among courts and commentators, the bankruptcy court reasoned that the purpose and provenance of the provision—section 502(b)(6) of the Bankruptcy Code—indicate that it was intended to apply regardless of a debtor's solvency. [read more …]
Chapter 11 Plan that Abridged Non-Debtor Lessee's Rights to Remain in Possession After Rejection Unconfirmable as Having Been Proposed in Bad Faith
The Bankruptcy Code includes special protections for real property lessees whose lease agreements are rejected in bankruptcy by a trustee or chapter 11 debtor-in-possession, by giving a lessee under a rejected real property lease the option to remain in possession of the leased premises during the remaining term of the lease. The Bankruptcy Code also provides that a chapter 11 plan must be proposed in good faith as a condition to confirmation of the plan. The interaction between these two concepts took center stage in a ruling handed down by the U.S. Bankruptcy Court for the District of Colorado. In In re The Aspen Chapel, No. 22-11531 MER, 2026 WL 120329 (Bankr. D. Col. Jan. 15, 2026), the court refused to approve a disclosure statement for a chapter 11 plan that, as proposed, would have violated the statutory protections given to a tenant under a rejected lease. The court also held that the plan was unconfirmable for this reason and because the debtor proposed the plan in bad faith by attempting to rewrite the provisions of the rejected lease in derogation of the non-debtor tenant's rights. [read more …]
Bankruptcy in Brief: U.S. Supreme Court Rules that Requests to Set Aside Void Judgments Must Be Made Within a "Reasonable Time"
In Coney Island Auto Parts Unlimited Inc. v. Burton, No. 24-808, 2026 WL 135998 (U.S Jan. 20, 2026), the U.S. Supreme Court resolved a circuit split among the federal circuit courts of appeals, ruling that a request for relief from a void default judgment entered in a bankruptcy case must be made within a reasonable time. [read more …]
Newsworthy:
Jones Day's Business Reorganization & Restructuring Practice was among nine practices that received Global Multi-Jurisdictional practice rankings in the 2026 edition of Chambers Global. BR&R lawyers recognized in the guide include Roger Dobson (Sydney), Ben Larkin (London), Fabienne Beuzit (Paris), Jasper Berkenbosch (Amsterdam), and Christine Borries (Munich).
Bruce Bennett (Los Angeles) and Corinne Ball (New York) were among the "Senior Statespeople" named in the 2026 edition of Chambers Global USA in the field of Bankruptcy/Restructuring.
On March 24, 2026, Kevyn D. Orr (Washington) received The M&A Advisor's Hall of Fame 2026 Leadership Award during the presentation of the 20th Annual Turnaround Awards at the 2026 Distressed Investing Summit in Palm Beach, Florida.
Heather Lennox (Cleveland/New York) received a Band 3 ranking in Bankruptcy/Restructuring in Chambers Global USA for 2026.
An article written by Corinne Ball (New York) titled "Consent, Control, and the Container Store: Navigating Third-Party Releases and Gatekeeper Injunctions After Purdue" was published in the February 25, 2026, edition of the New York Law Journal.
An article written by Heather Lennox (Cleveland/New York), Corinne Ball (New York), Dan T. Moss (Washington/New York), Thomas M. Wearsch (New York/Cleveland), Nicholas J. Morin (New York), and Gregory M. Gordon (Dallas) titled "The Year in Bankruptcy: 2025" was published on February 24, 2026, by Lexis Practical Guidance.
An article written by Brad B. Erens (Chicago) and Angela R. Pruitt (Chicago) titled "The Ninth Circuit's Expansive Reading of 'Financial Accommodations' that Cannot Be Assumed or Assigned in Bankruptcy" was published on February 24, 2026, by Lexis Practical Guidance.
On January 27, 2026, an article written by Jeffrey B. Ellman (Atlanta) titled "Florida Bankruptcy Court: Proposed DIP Financing and Sale Framework for Administratively Insolvent Debtors Did Not Violate Jevic's Prohibition of Priority-Deviating Distributions" was posted on the Harvard Law School Bankruptcy Roundtable.
An article written by Corinne Ball (New York), Dan T. Moss (Washington/New York), David S. Torborg (Washington), and Isel M. Perez (Miami) titled "New York Bankruptcy Court Denies Motion to Terminate Chapter 15 Recognition and Dismiss Chapter 15 Case" was published on February 24, 2026, by Lexis Practical Guidance.
On February 15, 2026, an article written by Corinne Ball (New York), Dan T. Moss (Washington/New York), Ben Rosenblum (New York), and David S. Torborg (Washington) titled "New York Bankruptcy Court Recognizes English Scheme of Arrangement Proceeding Under Chapter 15 Despite Concerns of Improper COMI Manipulation" was posted on the Singapore Global Restructuring Initiative Blog.
An article written by Dan B. Prieto (Dallas) titled "Pennsylvania District Court Applies 'Hypothetical Test' in Determining that Patent License Agreement Is Assignable in Bankruptcy" was published on February 24, 2026, by Lexis Practical Guidance.
An article written by Jeffrey B. Ellman (Atlanta) and Lauren Straight (Boston) titled "Liability Management After ConvergeOne: Equal Treatment, Exclusive Opportunities, and the Next Phase of "Lender-on-Lender" Warfare" was published in Vol. 39, No. 1-2026 of the AIRA Journal. Their article was also published in the March 2026 edition of the INSOL International Restructuring Alert.
Lawyer Spotlight: Isel M. Perez
Isel Perez, a partner in the Miami Office, represents clients in complex chapter 11 cases, out-of-court restructurings, cross-border insolvencies, and distressed M&A transactions.
Isel currently represents Bestwall (Georgia-Pacific) and DBMP (CertainTeed) in resolving asbestos liabilities, and she previously represented LTL Management and Red River Talc (Johnson & Johnson) in talc-related liability matters. Additional experience includes representing creditors in the Commonwealth of Puerto Rico's restructuring.
Isel also participates in the Firm's pro bono efforts assisting unaccompanied minors and women seeking refuge from violence in Central America. She helped secure asylum for two Guatemalan minors using a novel "Cinderella" theory.
