Chapter 11

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.

Continue reading here.

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.

Continue reading here.

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.

Continue reading here.