District Court Finds Constitutional Power to Grant Releases in Confirmation Orders
Unless the Third Circuit or the Supreme Court decides otherwise, bankruptcy courts in Delaware have constitutional authority to issue non-consensual, third-party releases of non-bankruptcy claims along with confirmation of a chapter 11 plan.
In an opinion on September 21, Chief District Judge Leonard P. Stark of Delaware abandoned the insinuation he made 18 months ago, adopted the analysis of Bankruptcy Judge Laurie Selber Silverstein from one year ago and held that the principles of Stern v. Marshall, 131 S. Ct. 2594 (2011), do not apply because confirming a reorganization plan with releases is not tantamount to a final judgment on the merits of non-bankruptcy claims.
Alternatively, Judge Stark held that the appeal from the Millennium Lab Holdings II LLC confirmation order was equitably moot because the plan had been consummated and releases could not be revoked without upsetting the plan as a whole. Judge Stark also reached the merits and held that the releases were proper because Judge Silverstein correctly applied Third Circuit criteria.
Related Stories
April 30, 2020
Chapter 13 plans can be extended up to 7 years 7 year Chapter 13. An…
April 29, 2020
Loan modifications under CARES Act. The law firm assists with loan modifications and mortgage relief…
April 18, 2020
Small business owners qualify for chapter 7 bankruptcy. The Coronavirus aftermath is destroying small businesses….
April 18, 2020
Glossary of Credit Terms 2-percent rule A rule of thumb to see if refinancing a…
Posted in: Debt & Bankruptcy
April 17, 2020
STEPS IN A BANKRUPCY CASE Mandatory Credit Counseling You must obtain a certificate from an…
Posted in: Debt & Bankruptcy
April 15, 2020
Convert a Chapter 13 to a Chapter 7 A chapter 13 client (currently in a…
April 14, 2020
April 14, 2020
How to file a bankruptcy book. This book discusses the “nuts and bolts” of getting a…
April 30, 2020
Chapter 13 plans can be extended up to 7 years 7 year Chapter 13. An…
April 29, 2020
Loan modifications under CARES Act. The law firm assists with loan modifications and mortgage relief…
April 18, 2020
Small business owners qualify for chapter 7 bankruptcy. The Coronavirus aftermath is destroying small businesses….
April 18, 2020
Glossary of Credit Terms 2-percent rule A rule of thumb to see if refinancing a…
Posted in: Debt & Bankruptcy
April 17, 2020
STEPS IN A BANKRUPCY CASE Mandatory Credit Counseling You must obtain a certificate from an…
Posted in: Debt & Bankruptcy
April 15, 2020
Convert a Chapter 13 to a Chapter 7 A chapter 13 client (currently in a…
April 14, 2020
April 14, 2020
How to file a bankruptcy book. This book discusses the “nuts and bolts” of getting a…