bankruptcy

The ‘next battleground’ in Chapter 11: Third Circuit set to weigh opt-out releases

Delaware Business Court Insider

In the months leading up to argument over the Boy Scouts of America’s reorganization plan before the Third Circuit, questions about third-party releases in bankruptcy have been addressed by a handful of other courts.

While it’s not the only issue in play on appeal, those opposed to the confirmed Chapter 11 plan that’s been effective since April 2023—specifically, a subset of sexual abuse accusets whose compensation is a key part of the plan and a group of Boy Scout insurers—have spent years challenging the opt-out third-party releases that were part of a global settlement within the plan, confirmed by Delaware Bankruptcy Court Judge Laurie Selber Silverstein and upheld by U.S District Court Judge Richard G. Andrews.

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SCOTUS’ Purdue Pharma position could shake up Boy Scout settlement, objectors say

Delaware Business Court Insider

The U.S. Supreme Court has only agreed to consider one Chapter 11 bankruptcy plan that includes billions in settlement funds and contested release terms, but its decision—affecting the opioid settlement—has the potential to make or break a second mass tort resolution, lawyers said.

Both Purdue Pharma and the Boy Scouts of America have approved plans that release the claims of third parties without requiring those parties’ consent. In both cases, objectors say bankruptcy courts don’t have the authority to approve plans that include that type of release.

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FTX attorneys’ billing far outpaces hourly rates seen in 2008 mega bankruptcies

Delaware Business Court Insider

Attorneys and consultants involved in the FTX bankruptcy have asked the District of Delaware bankruptcy court to approve billed hours and expenses totaling just under $37 million for the first six weeks of Chapter 11 proceedings.

Those proposed fee applications, the last of which was filed Feb. 27, cover both the FTX debtor entities and the committee representing creditors, with the largest segment by far being the $25.1 million billed by FTX lead counsel Sullivan & Cromwell across two filings. Those fees haven’t been approved or denied and could end up differing from the amount attorneys actually are paid.

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The ‘longest,’ ‘most emotional’ experience: Attorneys mark final plan approval in Boy Scouts case

Delaware Law Weekly

More than two and a half years after the Boy Scouts of America first filed for bankruptcy in the District of Delaware, attorneys for tens of thousands of sexual abuse survivors are celebrating the court’s approval of a final Chapter 11 plan.

Judge Laurie Selber Silverstein’s final approval last week means a trust of more than $2.4 billion in settlement funds obtained to date can start to be distributed to the more than 82,000 abuse claimants, though there’s no set timetable for when that process will be complete.

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With end to pandemic restrictions in sight, bankruptcy attorneys don’t know what to expect next

Delaware Law Weekly

Bankruptcy attorneys aren’t sure what to expect in the upcoming months as they wait to see the effects a number of pandemic-related factors will have on businesses. 

With some COVID-19-related restrictions being lifted recently and making it easier for many companies to get at least partially back to business as usual, there has been a slowdown in filings nationwide throughout the first half of 2021, with an increase just beginning. 

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