[Today’s post is from Braden Copeland, a Mercer 3L. He joined us as a Summer Associate in 2021. We’re delighted that he’ll come on as an Associate after he graduates this Spring. I asked him to look for a confirmation-related Subchapter V opinion and write something up for the blog. I’m thrilled to have the help. P.S. A too-early-in-the-year plan confirmation trial delayed our New Year’s post, but it’s still coming! – Dave]

I’m not prejudging it but I think the Trustee’s objection is an uphill battle simply because it sounds almost like he is arguing the 1111(b) election itself is not fair and equitable, which of course there is a reason it exists. But perhaps it is the application of the election and the facts and circumstances of this case that is not fair and equitable and whether or not we can go down that path.

— Judge Thomas Saladino, United States Bankruptcy Court for the District of Nebraska, as heard in a status teleconference on September 22, 2021.

Well, the court went down that path.

But, first, let me back up…

Continue Reading Confirmation DENIED: Subchapter V Trustee Challenges 1111(b) Election

As Stone & Baxter wraps-up its 25th year in business, we wanted to wish everyone a Merry Christmas and Happy Holidays. We hope this finds you well, safe, and with as much of your family as these crazy times will permit.

The Burys are headed to see Jessica’s parents in D.C. this week, but stay tuned for what should be a “fun”—and certainly nostalgic—New Year’s post. I do some of my best work from my inlaws’ Potomac basement. And don’t worry, it won’t have anything to do with bankruptcy. In fact, if you subscribe to the blog, follow me on LinkedIn, or, for that matter, worked with me any time after 1999, in law or otherwise, then there might be something in it for you.

*Yes, colleagues, that’s an iPhone photo of Jessica’s 2021 S&B holiday card.

P.S. For whatever this holiday cheer is worth, as of 4:15 p.m. Eastern, no one has filed a 12/25 bankruptcy in the United States. That’s unusual if you follow this sort of stuff like we do.

If you’d like to stay on top of important bankruptcy issues in 2022, then you can subscribe to Plan Proponent via email here.

 

Late yesterday, Judge Colleen McMahon (SDNY), in a 142-page (!) opinion, reversed the plan confirmation order in the Purdue Pharma Chapter 11 appeal on the basis that its non-consensual third-party releases are improper under the Bankruptcy Code.

As quick background, Purdue Pharma manufactures OxyContin. It sought Chapter 11 bankruptcy protection in September 2019 in response to over 3,000 opioid-related lawsuits. Behind Purdue Pharma is the Sackler family who founded the company and whose members are widely-accused of enabling the opioid crisis in the U.S. They’re not debtors in bankruptcy.

The Chapter 11 plan was to serve as the vehicle for a $4.5 billion settlement of the opioid litigation that the debtor proposed the Sacklers would fund in exchange for sweeping non-debtor releases, a controversial plan feature that we’ve addressed before. As of today, it couldn’t be more controversial. The bankruptcy court confirmed the proposal. Judge McMahon reversed. Beyond the headline level, it gets very complicated.

First, if you had trouble locating the opinion—the SDNY appeared to be down earlier today—then click here.

(Thanks to Braden Copeland for tracking it down during the outage!)

Second, for the very best coverage, click here to follow Prof. Melissa Jacoby (UNC Law). She has followed this case tirelessly as it has evolved in the courts and, more than any other, has endeavored in real time to condense and summarize the issues.

I asked Prof. Jacoby for her quick take this morning and, so generously for our humble little blog, she had this to say:

This opinion should be a wake-up call to bankruptcy lawyers. This opinion illustrates why you can’t rely on the ends (the money will be used for opioid abatement) to justify the means (using bankruptcy to permanently shield a billionaire family and a thousand other related parties over the objection of claimants who have direct causes of action against those other parties). Bankruptcy is not a source of unlimited authority, especially when it comes to the system’s most extraordinary powers.

I’m a debtor’s lawyer and “supposed to” view the Code as that unlimited source of authority when it benefits a client. However, I and my colleagues have become more and more sober these days about non-debtor releases, channeling injunctions, and the like, even if we’re often duty-bound to explore and test their limits.

With that, I’m “excited” to read the opinion this weekend and see if Plan Proponent is up to the task of providing anything more than a “breaking blurb.” Maybe a 14.2-part series? Just kidding.

If you’d like to stay on top of this and other important bankruptcy issues, then you can subscribe to Plan Proponent via email here.

Coming off our month long Judge Drake Series, I sat down this morning to comb through Westlaw for new Subchapter V opinions. I found a couple, but they can wait. What really got my attention was an opinion from Bankruptcy Judge Scott Clarkson (C.D. Cal). The case is In re Summit Financial, Inc., 2021 WL 5173331 (Bankr. C.D. Cal. Nov. 5, 2021). You can find the opinion here.

We attribute Judge Clarkson as having issued the very first substantive Subchapter V opinion. Technically, his November opinion relates to a Sub V debtor, but the issue is far more universal, and kind of scary, too: Is it ever plagiarism or, at least, unethical to copy/paste from other attorneys’ pleadings? Possibly.

Continue Reading Is it Ever Plagiarism to Use Other Attorneys’ Work Product?

Today we wrap-up our month-long series on Georgia’s Ret. Judge W. Homer Drake, Jr. Click here if you missed the first five posts. In this post, we finally get to Judge Drake’s #1 most cited Chapter 11 confirmation opinion, Metrocraft Publishing, a 37 year old disclosure statement opinion involving Paul Bonapfel before he was Bankruptcy Judge Bonapfel. And if you stick around, we’ve got a bonus paragraph or two about EMD, LLC v. Stabilis Fund II, LLC (2014), a 35 page (!) Till opinion that, while missing inexplicably from Westlaw, might be Judge Drake’s hidden masterpiece on confirmation issues.

Continue Reading Judges Series – Judge Homer Drake’s Top 10 Confirmation Opinions – Part 6 (#1)

 

As you can’t help but know by now, we’ve been covering Georgia’s Ret. Judge W. Homer Drake, Jr. Click here if you missed the first four posts. We’ll wrap-up Judge Drake’s Top 10 Chapter 11 confirmation opinions by Tuesday, with today’s post covering #2. We’re excited to have financial advisor and Till expert Richard Gaudet, of GGG Partners in Atlanta, reverse engineer in this post Judge Drake’s pre-Till analysis 30 years later, because why not? And for some New York Times worthy trivia about Judge Drake’s chambers, see below in the conclusion.

Continue Reading Judges Series – Judge Homer Drake’s Top 10 Confirmation Opinions – Part 5 (#2)

(Judge Drake and former SBLI/Drake Prof. Michael Sabbath)

Thanksgiving’s over, Christmas is fast approaching, and we’re finally near the finish line for our first Bankruptcy Judges segment. To start, we’ve been covering Georgia’s Ret. Judge W. Homer Drake, Jr. If you know Judge Drake, then you’ll agree that he’d likely be a little impatient at this point. “Mr. Bury, I think the Court understands your argument. Let’s wrap this up”—is something I heard a few times, especially after a third or fourth “Finally, Your Honor…” To wrap it up then, we’ll cover his three most cited Chapter 11 confirmation opinions by Monday, starting with #3 today. If you missed the introduction, you’ll find it here. We covered #10 through #6 here. And #5 and 4 here and here.

Continue Reading Judges Series – Judge Homer Drake’s Top 10 Confirmation Opinions – Part 4 (#3)

 

(Kate B.’s “Turkey Art”) (2015)

On Thanksgiving no less (one of my favorite days to post), we continue our series about Georgia’s Ret. Judge W. Homer Drake, Jr. I’m running out of neat Judge Drake pictures so we’ll reuse Kate’s (abstract) Thanksgiving art instead.

You can find the introductory post here. After that, we covered the first half of Judge Drake’s Top 10 Chapter 11 confirmation opinions (#10 through #6) here. And then we covered #5 here. Today we’ll just cover #4 because it’s so extensive and I need to pick up our Fincher’s turkey by 11. We’ll wrap it up with the Top 3 by month-end.

With that, here is Judge Drake’s fourth most cited and perhaps his most scholarly and extensive confirmation opinion.

Continue Reading Judges Series – Judge Homer Drake’s Top 10 Confirmation Opinions – Part 3 (#4)

We continue this week with our Bankruptcy Judges series. Georgia’s Ret. Judge W. Homer Drake, Jr. is the focus. You can find the introductory post here. Last week we covered the first half of Judge Drake’s Top 10 Chapter 11 confirmation opinions (i.e., #10 through #6). You can find it here. And this week, we continue with the second half. However, rather than combining the #5 to #1 opinions all in one post, we figured we’d experiment with one case per post for a shorter post that’s easier to digest. Here is Judge Drake’s fifth most cited confirmation opinion.

Continue Reading Judges Series – Judge Homer Drake’s Top 10 Confirmation Opinions – Part 2 (#5)

A couple of weeks ago, we kicked off a Bankruptcy Judges series, with the first part of the series being devoted to Georgia’s Ret. Judge W. Homer Drake, Jr. While the feedback  has been very positive, I attribute at least 90% of it to readers’ affection for Judge Drake that he earned over 53 years on the bench and 10% or less to my efforts to curate those years into an interesting opening profile. We now turn to the more serious business of covering (some of) Judge Drake’s 555 bankruptcy opinions.

As we encountered in our unlikely bankruptcy profiles of Justice Scalia, Justice Ginsburg, and Justice Gorsuch, transitioning from the profile to the decisions must be, if you’re doing it right, a little underwhelming. Nevertheless, over the next couple of weeks we’ll slice and dice our “JU(Drake)” Westlaw search to find the most educational and interesting parts. In this post, we’ll cover Judge Drake’s most cited confirmation-related Chapter 11 opinions in a Top 10 format.

Continue Reading Judges Series – Judge Homer Drake’s Top 10 Confirmation Opinions – Part 1 (#10 to #6)