Business Restructuring Review | Vol. 20 No. 5 | September'October 2021

• Published date: 23 September 2021
• Subject Matter: Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy
• Law Firm: Jones Day
• Author: Ms Corinne Ball, Brad B. Erens, Daniel J. Merrett, Dan T. Moss, Dan Prieto, Jane Rue Wittstein, Michael C. Schneidereit, Mark Douglas and Isel M. Perez

In This Issue:

Secured Lender's Credit Bid Right in Bankruptcy Sale Denied

In In re Figueroa Mountain Brewing, LLC, 2021 WL 2787880 (Bankr. C.D. Cal. July 2, 2021), the court denied a secured lender the right to credit bid its disputed claim in a bankruptcy sale of its collateral based on colorable allegations that, among other things, its loan agreement and all payments made by the debtor under it were fraudulent transfers and the lender had dominated and controlled the debtor in an effort to take control of its assets. [read more ... ]

Structured Dismissal of Chapter 11 Cases Did Not Violate Jevic

In In re KG Winddown, LLC, 628 B.R. 739 (Bankr. S.D.N.Y. 2021), the U.S. Bankruptcy Court for the Southern District of New York held that a 2017 U.S. Supreme Court ruling'that the Bankruptcy Code does not allow courts to approve distributions to creditors in a "structured dismissal" of a chapter 11 case that violate the Bankruptcy Code's ordinary priority rules without the consent of creditors'"left the door open where such dismissals do not violate the absolute priority rule and otherwise comply with the applicable provisions of the Bankruptcy Code.... [and] [h]ere, the Debtors' request for structured dismissals fits neatly through that open door." [read more ... ]

"Work-for-Hire" Film Production Agreement Not Executory Contract in Bankruptcy Due to Lack of Mutual Continuing Material Obligations

In Spyglass Media Group, LLC v. Bruce Cohen Productions (In re Weinstein Company Holdings LLC), 997 F.3d 497 (3d Cir. 2021), the U.S. Court of Appeals for the Third Circuit affirmed lower-court rulings holding that a "work-made-for-hire" contract between a film company and the producer of a motion picture was not an executory contract because the producer lacked any remaining "material obligations." In so ruling, the court noted that the parties to a contract can override the Bankruptcy Code's intended protections for a debtor in connection with certain contracts, but only by clearly and unambiguously providing that continuing obligations are material in the text of the agreement and thereby ensuring as much as possible that the contract will be deemed executory. [read more ... ]

Stalking Horse Bidder May Be Entitled to Administrative Priority for Expenses Despite Failure to Close Bankruptcy Sale

In In re Energy Future Holdings Corp., 990 F.3d 728 (3rd Cir. 2021), the U.S. Court of Appeals for the Third Circuit ruled that even though a "stalking horse" bidder failed...