Corporate Restructuring and Bankruptcy
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Paul Rubin, a partner at Herrick, Feinstein, and Hanh Huynh, an associate at the firm, write that because a $20 million severance payment was contemplated in connection with American Airlines' Chapter 11 bankruptcy case, the Office of the U.S. Trustee, tasked with overseeing the administration of the airline's reorganization case, objected to the severance payment that, in its view, was prohibited by federal bankruptcy law.
Barbra R. Parlin, a partner at Holland & Knight, writes that market participants that rely on the Section 546(e) safe harbor in assessing risk should pay attention to the 'Tribune' and 'Lyondell Basell' cases and consider the impact that the eventual rulings in these cases may have on their transactions in the future.
Thomas Califano, a partner at DLA Piper, and Daniel Egan, an associate with the firm, write that in a typical bankruptcy sale, the debtor is seeking to obtain the highest and best offer for its assets, usually the offer that will provide the best recovery for the debtor's estate. Purchase price is not the sole factor, however, and a not-for-profit debtor is charged with the fiduciary duties to act in furtherance of the organization's charitable mission while also acting in the best interests of creditors.
Luke A. Barefoot and Hugh K. Murtagh of Cleary Gottlieb Steen & Hamilton write: In a string of recent decisions, courts have continued to part ways in resolving the jurisdictional conflict between claims that are made nonremovable by statute and the general bankruptcy removal power. The stakes of this debate were recently raised when Congress eliminated the only other means of removing nonremovable claims. However, a close reading of this body of case law makes clear that bankruptcy removal power must trump any nonremoval statutes.