bankruptcy code

Mallinckrodt’s Second Bankruptcy ‘Flagrant’ Case of Bad Plan

Drugmaker Mallinckrodt Plc‘s return to bankruptcy, where it will substantially reduce payments to opioid claimants, comes after it fell short of overly optimistic projections from its first Chapter 11.

Opioid claimants will now see their $1.7 billion settlement fund established through Mallinckrodt’s first bankruptcy slashed to $700 million as a result of the flawed financial forecasts embedded in the company’s prior restructuring plan, which faced little formal pushback in court.

The proposed reduction in settlement funds will be “devastating” to opioid claimants, said Joseph Steinfeld, an opioid victim lawyer with ASK LLP.

The company’s Chapter 11 filing on Monday comes slightly more than a year after it emerged from its first bankruptcy with a deal resolving litigation from individuals and state and local governments that accused it of contributing to the national opioid crisis.

The first bankruptcy was supposed to be final. All corporate debtors are required to show a judge they can meet the obligations of their restructuring plans and are unlikely to restructure again, a standard known as “feasibility.” The bankruptcy code says a plan can be confirmed if it is “not likely” to be followed by further restructuring or liquidation.

Still, Chapter 11 refilings are

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September 4, 2023 by ATTORNEY

Yellow’s Bankruptcy Will Test Obligation to Teamsters Contract

The anticipated bankruptcy of trucking giant Yellow Corp. stands to have a major impact on collective bargaining agreements that cover roughly 22,000 workers, offering a chance to test when union contracts can survive insolvency proceedings.

Bankruptcy law contains provisions that arguably give unions more leverage to fight to keep their contracts in place as the company decides how to pay creditors, reorganize, or wind-down. Businesses, for example, generally face a higher bar to reject a bargaining agreement during a Chapter 11 proceeding than some other types of contracts.

Those measures will likely come into play between Yellow and the Teamsters, which represents a large swath of the company’s 30,000 workers. The union threatened to go on strike last month after the company initially failed to make a $50 million payment for employee benefits.

On Monday, the union said it was served with a legal notice that the Nashville, Tenn.-based company is ceasing operations and liquidating.

Teamsters General President Sean M. O’Brien called the news “unfortunate but not surprising.”

“Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government,” O’Brien said.

In June,

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August 8, 2023 by ATTORNEY

Exeter attorney makes first-ever SCOTUS appearance: ‘Every lawyer’s dream’

For Exeter attorney Terrie Harman, appearing before the U.S. Supreme Court for the first time on April 24 was exhilarating.

It’s a great privilege and a rare opportunity to appear before SCOTUS, and that is not lost on Harman.

“It’s every lawyer’s dream to go to the U.S. Supreme Court,” she says. “It was incredibly exciting. I can hardly believe that I went.”

Terrie Harman holding the brief for the case of Lac Du Flambeau Band of Lake Superior Chippewa Indians, et al v. Brian W. Coughlin, her first appearance before the U.S. Supreme Court.

Terrie Harman holding the brief for the case of Lac Du Flambeau Band of Lake Superior Chippewa Indians, et al v. Brian W. Coughlin, her first appearance before the U.S. Supreme Court.

Harman graduated from Franklin Pierce Law School in 1978 and began working at Pine Tree Legal Assistance in Bangor, Maine. There, she learned about bankruptcy law while representing indigents and developed a passion for the Bankruptcy Code. In the 1980s, she started her own firm, Harman Law Offices, where she was heavily involved in bankruptcy litigation and later became a Chapter 7 Bankruptcy Trustee.

Nowadays, her practice is mostly focused on probate litigation, estate planning, and general civil litigation, but it was one of her old bankruptcy cases that caught the eye of Boston lawyer, Richard Gottlieb, leading to a phone call that would place

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June 2, 2023 by ATTORNEY

How Bed Bath & Beyond is hedging its bankruptcy bet

Bed Bath & Beyond (BBBY) is hedging its bankruptcy bets, simultaneously posturing for a wind down while also vying to stay in business.

The dual-track strategy emerged Sunday as the home goods retailer filed for protection of its assets under Chapter 11 of the US Bankruptcy Code.

A Chapter 11 filing typically helps financially distressed companies work out a plan with their creditors to reorganize debt and emerge as a viable entity. But Bed Bath & Beyond announced it would focus on liquidating assets, a path typically pursued as part of a Chapter 7 bankruptcy.

The failed housewares chain said the dual-track strategy was the best way to maximize value for stakeholders. A press release stated it had already initiated a liquidation sale, though would conduct a limited marketing process to solicit interest in some or all of its assets.

“In the event of a successful sale, the company will pivot away from any store closings needed to implement a transaction,” the company said.

Other distressed companies have taken a similar path. David’s Bridal, which filed for Chapter 11 protection on April 17, also elected for a dual-track sale-liquidation process. And retailer Toys R Us similarly chose

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April 29, 2023 by ATTORNEY

U.S. Supreme Court says bankruptcy can’t nix debts for others’ frauds

  • U.S. Supreme Court says debtors unaware of fraud cannot wipe out debts
  • Case concerned sale of San Francisco home with undisclosed defects

Feb 22 (Reuters) – The U.S. Supreme Court on Wednesday ruled that individuals cannot use the bankruptcy process to wipe out debts incurred through fraud even in instances when they were not the ones who personally deceived their creditors.

The high court unanimously rejected Kate Bartenwerfer’s bid to use bankruptcy to eliminate debts stemming from a home sale in San Francisco on the grounds that she was unaware of fraudulent omissions her husband made in selling their house.

She had sought to discharge a debt owed to the buyer, Kieran Buckley, who had sued Kate and David Bartenwerfer for selling him their house while withholding information about major defects, like a leaky roof and defective windows.

But conservative Justice Amy Coney Barrett said the bankruptcy code allows someone like Kate Bartenwerfer, who was unaware of the deceit, to still be held liable as the law “turns on how the money was obtained, not who committed fraud to obtain it.”

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She noted the bankruptcy code’s bar on debtors discharging debts for money “obtained

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March 5, 2023 by ATTORNEY
October 2023
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