Ninth Circuit Extends “Barton” Doctrine to Bar Suit Against Creditors’ Committee Members Without Authorization from the Bankruptcy Court

In Blixseth v. Brown (In re Yellowstone Mountain Club), 841 F.3d 1090 (9th Cir 2016), the Ninth Circuit extended the Supreme Court’s holding in Barton v. Barbour, 104 U.S. 126 (1881), requiring a plaintiff to first obtain the bankruptcy court’s permission before suing a court appointed officer in another court, to apply to suits against the members… Continue reading Ninth Circuit Extends “Barton” Doctrine to Bar Suit Against Creditors’ Committee Members Without Authorization from the Bankruptcy Court

Bankruptcy Court Refuses to Approve Provision of Employment Application Providing Indemnity for Fees Incurred in Successful Defense of Fee Request

On January 29, 2016, the United States Bankruptcy Court for the District of Delaware refused to approve a provision in a retention application that would have allowed counsel to be reimbursed by the bankruptcy estate for fees incurred in a successful defense of an objection to their fees in the case.  See In re Boomerang Tube, Inc., Case No.… Continue reading Bankruptcy Court Refuses to Approve Provision of Employment Application Providing Indemnity for Fees Incurred in Successful Defense of Fee Request

9th CIRCUIT HOLDS ABSOLUTE PRIORITY RULE APPLIES IN INDIVIDUAL DEBTOR CHAPTER 11 CASES

In a major development affecting individual chapter 11 bankruptcy debtors, the 9th Circuit Court of Appeals has overruled earlier case law and ruled that the “absolute priority rule” under 11 U.S.C. § 1129(b)(2)(B)(ii) continues to apply to individual debtors following the 2005 BAPCPA amendments to the Bankruptcy Code.  See David K. Zachary v. California Bank… Continue reading 9th CIRCUIT HOLDS ABSOLUTE PRIORITY RULE APPLIES IN INDIVIDUAL DEBTOR CHAPTER 11 CASES

Ninth Circuit Rules that Deprizio Waivers Are Still Relevant, at Least to a Guarantor

On May 6, 2015, in Stahl v. Simon (In re Adamson Apparel, Inc.), 2015 US App. LEXIS 7508, the Ninth Circuit Court of Appeals became the first circuit level court to hold that an insider guarantor’s waiver of its indemnity, exoneration, contribution, and indemnity rights absolves the insider guarantor from potential preference liability for payments made to a… Continue reading Ninth Circuit Rules that Deprizio Waivers Are Still Relevant, at Least to a Guarantor

Directors Hit With $2.3 Million Judgment for Failing to Replace Incompetent Managers

Last week, the Third Circuit Court of Appeals upheld a $2.3 million jury verdict in favor of a Creditors’ Committee, finding that the directors of a failed Pittsburgh nursing home had breached their fiduciary duties to the corporation’s creditors by failing to remove the home’s administrator and chief financial officer when their mismanagement became apparent.  Official… Continue reading Directors Hit With $2.3 Million Judgment for Failing to Replace Incompetent Managers