Here’s an aggregation of 49 of my Twitter posts from the last week of June 2018, with links to important cases, articles, and news briefs that restructuring professionals should find of interest. Don’t hesitate to reach out and contact me to discuss any posts, and thank you for reading!


  • 363 Sale – Successor Liability – Chrysler – BK-SD-NY:  Claim versus New Chrysler can proceed for “conduct-based negligence & failure to warn claims” based on a 2015 post-sale accident in a 2004 Durango manufactured pre-sale was not barred by the Sale Order and Amended Master Transaction Agreement (“MTA”). “The Motion mischaracterizes the [Sale Agreement] MTA and attempts to draw a distinction between ‘conduct-related’ liabilities and ‘product-related’ liabilities that is not supported by the language of the Amended MTA.” In re Old Carco LLC
  • 363 Sale – Successor Liability – Withdrawal Claims – ND-IL:  Court dismisses as moot under BK Code Sec. 363(m) an appeal of an unstayed 363 sale order where the sole objective of the appeal was to allow the appellant to assert successor withdrawal liability claims against the Buyer. In re Central Grocers Inc
  • Avoidance Actions – Fictitious Profits – Recap of the Law – BK-SD-NY:  Court provides a primer on the law in rejecting arguments from certain Madoff customers that they gave “value” within the meaning of BK Code Sec. 548(c) in exchange for their withdrawal of fictitious profits. Securities Investor Protection Corporation v Bernard L Madoff Investment Securities
  • Claims Purchases – Anti-Assignment Clause Effect – BK-D-DE:  Anti-assignment clause in promissory note was legally valid and so voided the note transfer. Further, Debtors’ breach of the Notes didn’t render anti-assignment clause unenforceable: a non-breaching party can’t emerge post-breach w/more rts than it had pre-breach. In re Woodbridge Group of Companies LLC
  • Claims Purchases – Standing – Timing of Transfer – 5th Cir:  Debtor’s owner, who purchased a claim in order to obtain standing after the BK Ct entered an order appointing special counsel that would pursue the owner on veil piecing theories, lacks standing to object on appeal. He can’t belatedly claim creditor status & get standing retroactively. In re Technicool Systems Incorporated
  • Mineral Leases – Prepetition Settlement – Protection Through 544(a) Powers – 5th Cir:  Debtor’s mineral lease, ratified in settlement prepetition, can’t be dissolved for nonpayment of amounts due under the settlement agreement since: the public record shows that the consideration had been fully paid; no 3d party was placed on notice of the remaining payments due; BK Code Sec. 544(a) vests in the debtor the rights of a third party as bona fide purchaser. Matter of Goodrich Petroleum Corporation
  • Removal – Party Requirement – Requirement of Service – BK-ED-NC:  If a debtor seeking removal hasn’t been formally served, then it’s not a “party” to the state court suit per 28 USC § 1452 and so removal is improper since the Court can’t permit circumvention of the requirement that only a proper “party” may remove a state action to federal court. Problem here was that although everyone knew the plaintiff meant to sue the debtor, the service was on a DE corp with the same name as the FL corp that should have been named and served. In re Providence Wireless LLC
  • Unjust Enrichment – Pleading Requirements – BK-SD-NY:  Unjust enrichment claim dismissed where the complaint fails to allege that the buyer under the APA received any benefits for which it didn’t pay, even though it purchased assets from the debtor and “goodwill” from the owners (which itself was a challenged transfer). In re The Moyer Group Inc


  • Chevron Deference Reconsidered – SCOTUS:  Concurring and dissenting ops by Justices Kennedy and Alito, respectively, show they are troubled by the impact of the Court’s decision in Pereira on the “now increasingly maligned” Chevron decision. Per Chevron, Justice Alito writes, “if a federal statute is ambiguous & the agency that is authorized to implement it offers a reasonable interpretation, then a Ct is supposed to accept that interpretation.” For his part, Justice Kennedy is troubled by Chevron’s “reflexive deference.” Pereira v Sessions
  • Extraterritoriality – US Statutes – SCOTUS:  The Court reviews the 2-step approach to deciding questions regarding the extraterritoriality of a statute. This is a significant case for attorneys representing a trustee seeking extraterritorial application of US BK laws in avoidance actions. WesternGeco LLC v ION Geophysical Corp
  • Infringement – Shotgun Litigation – ND-IL:  Litigation strategy of suing an alleged software patent infringer’s unsuspecting customer is stayed indefinitely until the main infringement case against the software developer is disposed of. Mantissa Corporation v Old Second Bancorp Inc
  • Prevailing Party – Fees and Costs Distinguished – IL-AP-2d:  Payment of court costs by a party seeking to voluntarily dismiss its claims is routine and was (i) uncontested by plaintiff and (ii) not a significant issue in the litigation between the parties. But to be a “prevailing party” for purposes of recovering fees, the party must have achieved success on a significant issue. Thus, the award of costs to the defendant does not show that it was the prevailing party in the litigation.  Tanna Farms LLC v Golfvisions Management Inc
  • Restraint of Trade – Credit Card Anti-Steering Provisions:  US failed to prove anticompetitive effects merely by showing an increase in merchant fees. Its focus on just one side of a two-sided market meant that it failed to show that prices as a whole were greater than expected in a competitive market. Ohio v American Express Co
  • Restrictive Covenants – Confidential Information:  Complaint for misappropriation by former employees of confidential information survives motion to dismiss, with the Court stating: “Whether restrictive covenants are enforceable depends on the specific facts and circumstances of the individual case, . . . including “the near permanence of customer relationships, the employee’s acquisition of confidential information through his employment, and time and place restrictions.” Apex Physical Therapy LLC v Ball
  • Stare Decisis – SCOTUS:  Wayfair is a very interesting read. The pillars of stare decisis are crumbling in the cyber age, with the Court stating: “When it decided Quill, the Court could not have envisioned a world in which the world’s largest retailer would be a remote seller.” South Dakota v Wayfair Inc
  • Statutory Interpretation – “Under” – SCOTUS:  “For purposes of statutory interpretation, the word ‘under’ is a chameleon that must draw its meaning from its context.” Here, under the Illegal Immigration Reform & Immigrant Responsibility Act of 1996, it means “in accordance with” or “according to.” Pereira v Sessions
  • Textualists vs. Contextualists – SCOTUS:  The philosophical battle between textualists and contextualists is in fully display here as Justices Gorsuch and Breyer respectfully snipe at the flaws in the other’s use of the “traditional tools of statutory interpretation.” Wisconsin Central Ltd v US
  • Tortious Interference – Injunctive Relief – ND-IL:  Preliminary injunction issued on a tortious interference claim asserting that Party “A” breached an agreement that that Party “B” induced the breach. “A” initially refused to sell Party “C”s sinks to “B” because another party had the rights to the sink. “B” was displeased with “A”s decision & insisted on getting the sinks whose design he had seen. “A” subsequently crafted a virtually-identical sink to sell to “B”. Empire Industries Inc v Winslyn Industries LLC




©2018, Steve Jakubowski