Below is our initial take on recent bankruptcy-related developments:
Mallinckrodt Plan of Reorganization Confirmed by U.S. Court | Yahoo News
Mallinckrodt plc today announced that its Plan of Reorganization (the "Plan") has been confirmed by the U.S. Bankruptcy Court for the District of Delaware, paving the way for the Company to begin the next stage in its reorganization process.
S&K Take: The order confirming the plan is the culmination of a hard-fought case on many fronts. The most notable precedential aspect of this decision is certainly Judge Dorsey’s approval of non-consensual third-party releases. Similar releases were recently denied in the Purdue and Ascena cases (Second and Fourth Circuit respectively). Judge Dorsey acknowledged those cases but stated that he was following Third Circuit precedent, which permits non-consensual third-party releases in extraordinary cases like Mallinckrodt.
Judge Finds LTL Amicus Briefs Lacking but Allowed | The Deal
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Three amicus briefs will be allowed on the bankruptcy docket of Johnson & Johnson’s talc subsidiary, LTL Management LLC, despite the presiding judge finding a host of reasons to block them. Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey in Newark on Thursday, Feb. 3, spent nearly 10 minutes detailing the reasons he felt the briefs related to a case…
S&K Take: Judge Kaplan will allow leave for three amicus briefs supporting case dismissal to be filed. Despite that decision, he stated that he does not see much value in the briefs. The Judge noted that the briefs demonstrated only a general interest in the case (not directly addressing asbestos trusts and channeling injunctions), espoused views that were well represented, and were not filed timely. The hearing on dismissal will be Feb. 15.
Jet Owner's Chapter 11 Better Than Foreclosure, Judge Says | Law 360
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A New York bankruptcy judge has denied lender FitzWalter Capital Partners' motion to dismiss the Chapter 11 case of the owner of two jets leased to Vietnam Airlines, saying the bankruptcy appears to be a better deal for creditors than letting FitzWalter foreclose on the jets.
S&K Take: Judge Jones decided that dismissal of the JPA bankruptcy cases was not warranted. Notably the Judge ruled that the debtors’ property interest in a funded retainer was sufficient to establish jurisdiction in the US, and that the bankruptcy was a good-faith effort to reorganize, specifically citing the stalking horse bid in the case, which would cover a significant amount of liabilities in the cases.
Boy Scouts Lawyer Touts ‘Significant Progress’ Towards Sex-Abuse Settlement | Reuters
Lawyers representing the Boy Scouts of America shared they’re making progress gaining more support from abuse survivors for the proposed multi-billion-dollar settlement to compensate the survivors who filed abuse claims.
S&K Take: Mediation in the Boy Scouts’ cases has continued, and, according to debtors’ counsel, is close to bearing fruit. There are still holdouts ahead of the Feb. 22 confirmation hearing. If the parties are able to close the gap and resolve their differences, it could smooth a path towards a bankruptcy exit.
Sacklers, States Near Bigger Purdue Pharma Opioid Settlement | Bloomberg Law
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Members of the Sackler family are nearing a deal that would substantially increase their contribution to the opioid settlement, which is already at $4.325 billion.
S&K Take: As in the Boy Scouts’ cases, it appears the parties in the Purdue saga have been working hard at mediation. Judge Chapman, acting as a mediator, announced that the parties have made progress towards a resolution, with the Sacklers potentially putting in more funds. If ultimately settled, it could end the appeal process with respect to the Sackler releases, which has changed the bankruptcy landscape and seemingly opened the floodgates for courts seeking to question what was a fairly common practice.