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A bankruptcy court properly held that derivative claims based on “piercing the corporate veil theory of liability [were] released under” a confirmed reorganization plan, but that direct “claims for negligent undertaking” were not released and “could be asserted” in state court against the debtors’ equity sponsors (Sponsors). In re Port Neches Fuels, LLC, 2024 WL 1298590, *1 (D. Del. Mar. 27, 2024). The confirmed plan, affirmed by the district court, had released “any and all claims … (including any derivative claims, asserted or assertable on behalf of the Debtors [and] the Reorganized Debtors … against certain released parties,” including the Sponsors. When plaintiffs sued the Sponsors in Texas state court, the defendants asked the bankruptcy court to “enforce the plan, arguing that the plaintiffs’ claims were based on piercing the corporate veil theory of liability, that any such claims belonged to the Debtors’ estates, and accordingly those claims were released under the plan.” Id.
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Courts Split Over Requirement for Chapter 15 Jurisdiction In the U.S.
By Daniel A. Lowenthal
If a foreign debtor doesn’t reside in, have a domicile or place of business in, or have property in the U.S., can the foreign representative of the debtor utilize Chapter 15 to obtain discovery to use in the foreign proceeding?
Guidance on the Enforceability of Lockup Provisions
By Paul A. Rubin and Hanh V. Huynh
A recent decision from Chief Judge Glenn of the Southern District of New York Bankruptcy Court provides clarity to creditors and debtors alike in cases where the parties’ settlement negotiations include an agreement requiring a creditor to support the debtor’s Chapter 11 plan.
Appellate Court Provides Practical Guide to Commercial Landlord’s Bankruptcy Damage Claims
By Michael L. Cook
The court’s decision, supported by a well-reasoned bankruptcy court decision, provides a helpful overview of the most recent law governing landlords’ damage claims in bankruptcy cases.
Determining the Indubitable Equivalent of A Bankruptcy Claim
By Peter Gampel
One aspect of the dispute in interpreting clauses in an agreement from a financial point of view, and one with significant consequences, centered around the term indubitable equivalent value for a Class 5 creditor in the context of a debtor’s fifth amended Chapter 11 plan and objection to confirmation filed by creditor. The U.S. Bankruptcy Court, Middle District of Florida, Jacksonville Division opined on that issue.