In 2024, the Supreme Court, in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024), held that the Bankruptcy Code does not authorize nonconsensual third-party releases in Chapter 11 reorganization plans, meaning affected creditors cannot be forced to release claims against non-debtors without their consent. The decision specifically overturned Purdue’s Chapter 11 Plan, which attempted to release the owners from liability, and the case was sent back to the lower court. The decision resolved a circuit split on the issue…More

Last week, the Trump administration and Congress proposed spending cuts that if enacted are likely to affect federally funded health insurance programs such as Medicaid and the Affordable Care Act (ACA). These cuts could disrupt cash flow for already vulnerable health care providers, bringing their financial problems into sharper focus as government payor programs face budget reductions. This may lead to increased rates of insolvency among health care institutions, particularly those that rely heavily on reimbursement from such programs. And that…More

As previously discussed and anticipated in prior blog posts,[1] the United States Supreme Court’s decision in Siegel v. Fitzgerald, 596 U.S. 464, 142 S.Ct. 1770, 213 L.Ed.2d 39 (2022), which struck down as unconstitutional the United States Trustee System Fund (Pub. L. 115-72, Div. B, 131 Stat. 1229) (the “2017 Act”) on the basis that the disparate treatment between the fees charged under the U.S. Trustee System[2] and the fees charged in the six Bankruptcy Administrator Districts violated the uniformity…More

On Friday September 28, 2023, the U.S. Supreme Court agreed to review the United States Trustee’s appeal from the Tenth Circuit Court of Appeal’s holding that the Office of the United States Trustee should refund overpayments made by chapter 11 debtors under the United States Trustee System Fund (Pub. L. 115-72, Div. B, 131 Stat. 1229) (the “2017 Act”), which the Supreme Court held violated the uniformity requirement of the Bankruptcy Clause set forth in Article I, § 7, cl.…More

As discussed in our earlier blog post, In re The Hacienda Company, LLC – a Flicker of Hope for Distressed Cannabis Companies:  Bankruptcy May be Available to Liquidate Assets of Non-Operating Cannabis Companies | In Solvency (foxrothschild.com), Judge Neil Bason of the United States Bankruptcy Court for the Central District of California held that The Hacienda Company LLC (“Hacienda”), a “former” cannabis company that terminated its wholesale manufacturing and packaging business prior to filing its chapter 11 bankruptcy petition, could…More

Cannabis clients are often surprised to learn that the bankruptcy courts are unavailable to liquidate or reorganize most cannabis businesses.  Indeed, the Office of the United States Trustee (the “UST”) has a mandate from the Department of Justice to move to dismiss cannabis-related bankruptcies when they are filed, and many courts have dismissed such cases, even where the debtor’s ties to cannabis are remote or ancillary to the cultivation, production, sale or distribution of cannabis, or when the debtor no…More

In a recent decision by Chief Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York presiding over cryptocurrency Chapter 11 megacase, In re Celsius Network, LLC, et al., Case No. 22-10964 (MG), Judge Glenn held that crypto customers of Celsius who deposited their cryptocurrency in interest-bearing accounts under Celsius’ “Earn Program” have lost all right and title to those assets.  The ruling, which affects approximately 600,000 accounts with assets valued at $4.2 billion,…More

As discussed in our prior blog post entitled, “The Circuit City Landmine (Siegel v. Fitzgerald): Supremes Declare Bankruptcy Fee Hike Under United States Trustee Program Unconstitutional –What Happens Next?”, the United Supreme Court held in Siegel v. Fitzgerald, 596 U.S. ___ , 2022 WL 1914098 (Jun. 6, 2022), that Congress’s enactment of a temporary increase in the fee rates applicable to large Chapter 11 cases in 2017 to address a shortfall in the United States Trustee System Fund (Pub. L.…More

By:   Keith C. Owens While it is becoming increasingly rare for the Supreme Court to speak with a singular voice on virtually anything these days, bankruptcy provides a rare exception. On June 6, 2022, the Supreme Court unanimously held in Siegel v. Fitzgerald, 596 U.S. ___ , 2022 WL 1914098 (Jun. 6, 2022), that Congress’s enactment of a temporary increase in the fee rates applicable to large Chapter 11 cases in 2017 to address a shortfall in the United States Trustee System…More

By: Zach Williams, Associate, Fox Rothschild LLP (Las Vegas, NV)   On April 5, 2022, the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) published an opinion, Censo, LLC v. Newrez, LLC, BAP No. NV-21-1125-LTF (Apr. 5, 2022), which provides a framework for addressing whether a non-bankruptcy court’s postpetition order on a pending matter violates the automatic stay. In Censo, the former owner of a mortgaged condominium unit (the “Property”) defaulted on his homeowner’s association (“HOA”) assessments, and the HOA foreclosed on the Property.…More