Law.com Subscribers SAVE 30%

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

Will the <b><I>Tronox</I></b> Decision Help the New GM?

By Corinne Ball
August 01, 2017

General Motors LLC — the New GM — is subject to a multitude of lawsuits stemming from its alleged wrongdoings and the alleged wrongdoings of its predecessor, General Motors Corp. — the Old GM — which sold its assets to New GM pursuant to a § 363 “free and clear” sale in bankruptcy in 2009. The U.S. Court of Appeals for the Second Circuit previously held that certain plaintiffs could not be barred by the “free and clear” provisions of the 2009 sale order (a decision the U.S. Supreme Court elected not to review). Following the denial of its petition for certiorari, the New GM is attempting to resurrect its principal defense against these lawsuits, arguing that the tort claims brought against New GM are barred on a new theory based on a recent Second Circuit decision in In re Tronox, 855 F.3d 84 (2d Cir. 2017).

In Tronox, the issue was whether individual claimants could pursue certain claims against Kerr-McGee, which had settled with the liquidation trust established as part of the Tronox bankruptcy. In this case, the appellate court barred individual plaintiffs from pursuing claims against Kerr-McGee, stating that the Bankruptcy Code prevented individual creditors from pursuing claims against a third party that are truly aimed at recovering “estate” assets. While Tronox may be a recent development in the Second Circuit, the theory has been previously adopted in the successor liability context in the U.S. Court of Appeals for the Third Circuit.

In In re Emoral, 740 F.3d 875 (3d Cir. 2014), the court held that prepetition personal injury claims that relied upon the “mere continuation” theory of successor liability constituted causes of action that were property of the bankruptcy estate and thus eligible for settlement, release and discharge as part of the bankruptcy proceeding. See Corinne Ball, “'Emoral': Third Circuit Provides Comfort to Distressed Purchasers,” NYLJ (April 24, 2014).

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
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

The Benefits of Blockchain for e-Discovery and Data Preservation Image

As businesses across various industries increasingly adopt blockchain, it will become a critical source of discoverable electronically stored information. The potential benefits of blockchain for e-discovery and data preservation are substantial, making it an area of growing interest and importance.