In the recent case Czyzewski v. Jevic...
In the recent case Czyzewski v. Jevic Holding Corp (Jevic), the Supreme Court ruled that bankruptcy courts lack the legal power to approve the structured dismissal of any Chapter 11 bankruptcy case “that provides for distributions that do not follow ordinary priority rules without the affected creditors’ consent.” In the Los Angeles Lawyer article “No Skipping Allowed,” David Kupetz analyzed the Jevic ruling and discussed the interaction between the priority rules of the Bankruptcy Code and dismissal of a Chapter 11 case, as well as the concern that expansion of the Jevic ruling may undermine future bankruptcy court discretion.
In its ruling, the Supreme Court emphasized that the Bankruptcy Code’s priority system is a “fundamental underpinning of business bankruptcy law.” It found that letting structured dismissals circumvent this system would nullify protections Congress has granted certain classes of creditors (such as employee wage claims), increase the risk of collusion and make settlements harder to achieve. The Supreme Court also rejected the bankruptcy court’s findings in the Jevic case that a priority-violating settlement was the only means for recovery by unsecured creditors, and that the terminated employees involved in the case were not harmed since they would receive nothing under any scenario.
Kupetz concluded the article by noting that though the Court did not explicitly reach beyond the interplay between priority rules and Chapter 11 dismissal, concerns persist that the scope of the Court’s ruling could be expanded, undermining necessary bankruptcy court discretion with regard to settlements in general, as well as certain types of structured dismissals.
We are pleased to announce that the Executive Committee of the Business Law Section of the State Bar of California has appointed Jason Balitzer as a member of the Business Law Section’s Insolvency Law Committee (ILC).
The ILC serves as a forum to educate lawyers nationwide on recent developments and current issues in the field of insolvency law and also provides a platform to review, comment on, and propose legislation relevant to insolvency lawyers. As a member of the ILC, Mr. Balitzer will work with other ILC committee members to establish and implement the ILC’s goals during the course of his three-year term of membership.
With consumer purchasing preferences having a profound effect on brick-and-mortar stores, retailers have been forced to adjust to changing trends and find their place in the online market. Bloomberg BNA turned to Member Victor Sahn to weigh in on the challenges facing retailers.
“Even the behemoth Walmart is blinking under the glare of Amazon’s popularity and scrambling to find its place in the online marketplace,” said Sahn. “Malls are going to need to shrink or repurpose for other uses. They’re going to have to focus on ‘right-sizing their footprints.’”
SulmeyerKupetz was proud to be a sponsor of the Turnaround Management Association (TMA) event “War Stories from the Tranches: What it Takes to Get Private Equity Deals Done in Today’s Market,” presented by Teri Stratton of Piper Jaffray & Co., Carolyn Glick of Tennenbaum Capital Partners, Colin Leonard of Clearlake Capital Group, Rahul Sawhney of Z Capital Partners and Jordan Wadsworth of Sun Capital Partners.
The panel discussed the challenges and opportunities in the current market environment, as well as the different approaches to diligence and valuation in a competitive market. Panel members also discussed their observations on the current market and what it takes to engineer a successful transaction today.
TMA is an organization with a network of more than 9,000 turnaround practitioners, bankruptcy attorneys, lenders, bankers, workout officers, investors and other related professionals worldwide.
The increase of online buying has led many major retail stores to close several locations or declare bankruptcy. These store closures have hit malls hard, and according to Member Victor Sahn, it is only going to get worse. In the San Gabriel Valley Tribune and Daily Breeze articles “Attorney says store closures could fuel retail ‘Armageddon,’” Sahn discussed strategies malls should implement in hopes of staying alive.
If online buying, store closures and retail bankruptcies continue, it is projected that 275 malls will close during the next five years. In order for malls to thrive, they need to provide a different kind of experience.
“It may be a higher-end experience with more restaurants and will bring foot traffic, and it could be theaters or workout facilities where soccer moms or others who work during the days can come by,” said Sahn. “You have to give people other reasons to come to the mall. It could even be recreation for children.”
SulmeyerKupetz is pleased to announce that Member Howard Ehrenberg has been selected for inclusion in The Best Lawyers in America© 2018 for his work in insolvency and reorganization law. This is the second consecutive year he has been listed.
For more than three decades, Best Lawyers® has become regarded as the definitive guide to legal professionalism and excellence around the globe. Best Lawyers® is based on an exhaustive peer-review survey. More than 52,000 leading attorneys cast 5.5 million votes on the legal abilities of other lawyers in more than 130 practice areas.