May 24, 2017
In the featured cover article published in the May edition of the American Bankruptcy Institute Journal, Tysons associate Kathryn Keane and Jacksonville associate Courtney McCormick and attorney Anna Haugen assessed the impact of a recent U.S. Supreme Court ruling on structured dismissals in Chapter 11 cases. Keane, McCormick and Haugen are members of the firm’s Restructuring and Insolvency Department.
The court ruled in Czyzewski v. Jevic Holding Corp. that structured dismissals cannot circumvent the Bankruptcy Code’s priority rules without the consent of affected creditors.
The decision “dealt a blow to debtors hoping to use structured dismissals as a cost-saving alternative to the complex and expensive issues that accompany plan confirmation,” the authors wrote. While the court did not invalidate structured dismissals, its ruling could have the effect of making them prohibitively expensive, the authors explained in the article.