Another Fifth Circuit Humdinger: This Time, Limiting Gatekeeping
Picking up where Serta Simmons left off, the Fifth Circuit nixes another creative chapter 11 plan.
Court:
Opt-Out Plan Confirmed with Impaired Creditors Almost Unanimous in Support
In the Spirit Airlines reorganization, no creditors with an economic interest had opposed confirmation of a plan with opt-out releases for nondebtors.
District Court Doesn’t Say Whether ‘Person Aggrieved’ Survived Truck Insurance
District court upholds an ‘opt-out’ chapter 11 plan with releases for nondebtors.
Court:
Bankruptcy Judge Rejects a District Court’s Narrow View of Sales Free and Clear
New York’s Judge Philip Bentley interpreted Section 363(f)(5) to permit a sale free and clear whenever a creditor could conduct a foreclosure or a UCC sale.
Texaco’s 1988 Confirmation Didn’t Kill Environmental Suits Decades Later
New York’s Bankruptcy Judge David Jones reopened Texaco’s 1988 bankruptcy to ensure that state courts wouldn’t mistakenly decide that environmental claims were discharged
Purdue Doesn’t Preclude Injunctions from Protecting Nondebtors for the Life of a Plan
New York’s Judge John Mastando saw no reason a Subchapter V plan couldn’t enjoin lawsuits against nondebtors for the life of a five-year plan.
Benchnotes April 2025
Journal Issue:
No Second Restructuring of the Same Debt in a Different Venue
Delaware judge wouldn’t allow a chapter 11 debtor to restructure the same secured debt a second time in a different venue.
Court:
Barton Halted Third Parties from Suing in an Allegedly Better Forum
When third parties sued a trust created by a confirmed chapter 11 plan, Judge Garrity declined to invent any new exceptions to the Barton doctrine.