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Showing posts in Structured Dismissal

The Supreme Court’s Answer is Simply “No”—Structured Dismissals Cannot Deviate From the Code’s Priority Rules Without Consent of Affected Creditors

Czyzewski v. Jevic Holding Corp., 580 U.S. ___ (2017)

In Official Comm. of Unsecured Creditors v. CIT Group/Business Credit, Inc. (In re Jevic Holding Corp.), 787 F.3d 173 (3d Cir. May 21, 2015), the Third Circuit Court of Appeals examined structured dismissals and whether the distributions provided for therein can deviate from the Bankruptcy Code’s priority distribution scheme.  It held that they could but only in the “rare case.”  Almost two years later, the Supreme Court has weighed in on the issue, disagreeing with the Third Circuit and holding that a bankruptcy court cannot approve a structured dismissal that… Read More

Third Circuit Approves of Structured Dismissals That Deviate From the Bankruptcy Code’s Priority Scheme – But Only in Rare Cases

Official Comm. of Unsecured Creditors v. CIT Group/Business Credit, Inc. (In re Jevic Holding Corp.), No. 14-1465, 2015 WL 2403443 (3d Cir. May 21, 2015)

The Third Circuit Court of Appeals (the “Third Circuit”) answered a novel question of bankruptcy law in the affirmative—whether a chapter 11 case can ever be resolved in a “structured dismissal” (a disposition that winds up the bankruptcy with certain conditions attached instead of simply dismissing the case and restoring the status quo ante) that deviates from the priority scheme of the Bankruptcy Code.  In rare cases, the Bankruptcy… Read More

District Court Affirms Bankruptcy Court’s Approval of a Settlement and Structured Dismissal in the Face of an Absolute Priority Challenge

Czyzewski v. Jevic Holding Corp. (In re Jevic Holding Corp.), No. 13-104 (SLR), 2014 WL 268613 (D. Del. Jan. 24, 2014)

On January 24, 2014, Judge Sue L. Robinson affirmed a Bankruptcy Court order approving a settlement and structured dismissal of the chapter 11 cases of Jevic Holding Corp. and its affiliated debtors (the “Debtors“) in the face of a challenge by certain appellants asserting WARN claims that such settlement, among other things, violated the absolute priority rule of section 1129 of the Bankruptcy Code.  The settlement, reached among the Debtors, the… Read More