Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

KickerFeaturesSectionsNewsLJN NewslettersThe Bankruptcy Strategist

Structured Dismissals and Application of Non-Estate Proceeds

BY Adam H. Friedman
February 29, 2016

Corporate restructuring practice has dramatically evolved in the nearly 40 years since enactment of the 1978 Bankruptcy Code. Since In re Lionel Corp. , 722 F.2d 1063 (2d Cir. 1983), one of the more significant changes to Chapter 11 practice has been the use of section 363 to sell the assets of a debtor, prior to confirmation of a plan, as a means to restructure and maximize value. This transactional use of the Bankruptcy Code has, by necessity, changed how cases are administered. With more frequent under-water balance sheets and ever evolving, more complex capital structures, many modern cases have required flexible approaches. Practitioners and bankruptcy courts have been forced to adapt. Two recent precedential decisions from the U.S. Court of Appeals for the Third Circuit provided a much-needed stamp of approval on these flexible and pragmatic approaches to modern restructuring practice.

Structured Dismissal As 'The Least Bad Alternative'

In Official Committee of Unsecured Creditors v. CIT Group/Business Credit Inc. (In re Jevic Holding Corp.), 787 F.3d 173 (3d Cir. 2015), prepetition, Sun purchased Jevic, a trucking company, through a leverage buy-out funded by CIT. On the eve of filing for Chapter 11, Jevic ceased its operations and gave termination notices to its employees. As of the petition date in 2008, Jevic owed $53 million to CIT and SUN as secured creditors, and over $20 million to taxing authorities and general unsecured creditors. Two lawsuits were filed during the bankruptcy case. One was from a group of truck drivers against Jevic and Sun. alleging violations of the Worker Adjustment and Retraining Notification Act (WARN) for failure to provide adequate termination notice. The truck drivers wanted $12.4 million in damages, $8.3 million of which they asserted was entitled to priority under section 507(a)(4) of the Bankruptcy Code (for wages, subject to a cap per employee, earned within 180 days prior to the petition date). The other was from the official creditors' committee, on behalf of Jevic's estate, against Sun and CIT seeking to avoid the leverage buyout transactions.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Yachts, Jets, Horses & Hooch: Specialized Commercial Leasing Models Image

Defining commercial real estate asset class is essentially a property explaining how it identifies — not necessarily what its original intention was or what others think it ought to be. This article discusses, from a general issue-spot and contextual analysis perspective, how lawyers ought to think about specialized leasing formats and the regulatory backdrops that may inform what the documentation needs to contain for compliance purposes.

Hyperlinked Documents: The Latest e-Discovery Challenge Image

As courts and discovery experts debate whether hyperlinked content should be treated the same as traditional attachments, legal practitioners are grappling with the technical and legal complexities of collecting, analyzing and reviewing these documents in real-world cases.

Identifying Your Practice's Differentiator Image

How to Convey Your Merits In a Way That Earns Trust, Clients and Distinctions Just as no two individuals have the exact same face, no two lawyers practice in their respective fields or serve clients in the exact same way. Think of this as a "Unique Value Proposition." Internal consideration about what you uniquely bring to your clients, colleagues, firm and industry can provide untold benefits for your law practice.

Risks and Ad Fraud Protection In Digital Advertising Image

The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.

Turning Business Development Plans Into Reality Image

This article offers practical insights and best practices to navigate the path from roadmap to rainmaking, ensuring your business development efforts are not just sporadic bursts of activity, but an integrated part of your daily success.