Mid Cap
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July 03, 2024
Insurer Seeks To Cover D&O Defenses In DMK Pharma Ch. 11
An insurance company asked a Delaware bankruptcy court Wednesday to let it pay defense expenses under a $5 million directors and officers policy for bankrupt biotechnology company DMK Pharmaceuticals Corp., which is facing an investor lawsuit and two federal agency investigations, arguing the policy proceeds aren't part of DMK's Chapter 11 estate.
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July 03, 2024
Takeoff Seeks To Alter Ch. 11 Loan To Avoid Liquidation
Bankrupt grocery automation company Takeoff Technologies was unable to reach a deal with creditors to transfer a software license and instead plans to remove the transfer from its debtor-in-possession loan, in a bid to avoid a conversion to a Chapter 7 liquidation.
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July 03, 2024
Purdue Ruling Threatens To Limit Broader Bankruptcy Powers
The U.S. Supreme Court's narrow read of a bankruptcy statute in its decision to reject nonconsensual third-party releases in the Purdue Pharma case could curb courts' power to authorize a range of Chapter 11 requests that aren't explicitly allowed under the law.
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July 03, 2024
Giuliani Creditors Say Conversion Motion 'Just Games'
A New York bankruptcy judge will hear arguments next week over whether to convert Rudy Giuliani's Chapter 11 to a liquidation, a move his creditors denounced as gamesmanship with the bankruptcy system.
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July 02, 2024
Purdue Sets Stage For Boy Scouts Equitable Mootness Fight
After the U.S. Supreme Court's ruling last week in the Purdue Pharma case, the Boy Scouts' bankruptcy plan is back in focus before a federal appeals court, potentially reigniting a heated debate over equitable mootness, a doctrine courts have long used as grounds to avoid reopening and tinkering with already-consummated bankruptcy plans.
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July 02, 2024
Sens. Urge Synapse Partners To Free Up Customer Funds
A group of Democratic senators led by banking committee chair Sherrod Brown, D-Ohio, called on the owners and banking partners of bankrupt fintech intermediary Synapse Financial Technologies to restore customers' access to their deposits.
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July 02, 2024
Ex-Bankruptcy Judge Will Be Deposed Over Atty Romance
The former Texas bankruptcy judge whose secret relationship with a Jackson Walker LLP attorney ignited a major judicial ethics scandal has agreed to sit for a seven-hour deposition to answer questions about the episode.
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July 02, 2024
Toymaker Basic Fun Says It's Close To Deal With Lenders
Counsel for toymaker Basic Fun told a Delaware bankruptcy judge on Tuesday the company is close to an agreement with secured creditors on a plan to restructure $65.7 million in funded debt and emerge from Chapter 11.
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July 02, 2024
Giuliani Disbarred In New York Over Election Falsehoods
A New York appellate court Tuesday barred Rudolph Giuliani from practicing law in New York, citing ample evidence that the former New York City mayor made repeated false statements about the 2020 presidential election.
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July 01, 2024
Giuliani Wants Bankruptcy Converted To Allow For Liquidation
Rudy Giuliani on Monday asked a New York federal bankruptcy judge to convert his voluntary Chapter 11 bankruptcy to a Chapter 7 proceeding, which would allow him to liquidate his assets to pay his debts.
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July 01, 2024
NJ Hospital Dodges $14.7M In Damages Over Audits
An accounting firm for the former operator of Hoboken University Medical Center has dodged more than $14.7 million in malpractice liability damages even though a New Jersey federal jury found it had violated professional accounting standards in audits of the financially struggling hospital.
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July 01, 2024
How We Got To Purdue: From Johns Manville To The Sacklers
The U.S. Supreme Court upended years of bankruptcy practice last week when it definitively barred nonconsensual releases of nondebtors in the Chapter 11 case of Purdue Pharma, saying no authority exists to extinguish claims that creditors of a bankrupt entity may have against related entities that themselves did not file for bankruptcy.
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July 01, 2024
Takeoff Ch. 11 Loan Delayed As Creditors Seek Liquidation
A Delaware bankruptcy judge indicated Monday that he wouldn't give final approval to the debtor-in-possession loan in Takeoff Technologies' Chapter 11 bankruptcy in its current form, giving the grocery automation business more time to negotiate a solution and avoid conversion of its case to a Chapter 7 liquidation.
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July 01, 2024
Optio Rx Scores Final Green Light On $10M DIP Deal
A Delaware bankruptcy judge on Monday gave Illinois-based specialty pharmacy chain Optio Rx final approval for a $10 million debtor-in-possession financing package to fund its Chapter 11 case after hearing issues regarding it had been resolved.
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July 01, 2024
Justices Told Clarity Needed On Ch. 11 Exculpations
Highland Capital and parties opposed to the venture capital firm's Chapter 11 plan asked the U.S. Supreme Court to clear up how the high court's recent rejection of third-party claims releases in the Purdue Pharma reorganization applies to Chapter 11 exculpations.
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July 01, 2024
Talc Victims Can't Block J&J From Filing For Ch. 11 Outside NJ
A New Jersey federal judge has denied a bid for a restraining order from a group of patients suing Johnson & Johnson over claims they were injured by its talc products, saying their concern that the company would try to file for bankruptcy outside the Garden State is based on speculation and not ripe for litigation.
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July 01, 2024
Catching Up With Delaware's Chancery Court
Two multimillion-dollar settlement approvals, a $25 million fee-shifting demand, and a biotech merger spoiled by murder: This was just the beginning of the drama last week in the nation's preeminent court of equity. Shareholders in satellite companies filed new cases, a cannabis company headed toward trial, and there were new developments in old disputes involving Tesla and Truth Social.
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July 01, 2024
Clothing Maker Delta Apparel Hits Ch. 11 With Sale Plans
Delta Apparel Inc., a Georgia-based clothes manufacturer, and six affiliates filed for Chapter 11 bankruptcy protection in Delaware with around $250 million in debt and plans to sell the lifestyle and clothes brand Salt Life while in bankruptcy.
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June 28, 2024
Chevron's End Is Just The Start For Energized Agency Foes
By knocking down a powerful precedent that has towered over administrative law for 40 years, the U.S. Supreme Court's right wing Friday gave a crowning achievement to anti-agency attorneys. But for those attorneys, the achievement is merely a means to an end, and experts expect a litigation blitzkrieg to materialize quickly in the aftermath.
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June 28, 2024
In Chevron Case, Justices Trade One Unknown For Another
The U.S. Supreme Court's decision to overrule a decades-old judicial deference doctrine may cause the "eternal fog of uncertainty" surrounding federal agency actions to dissipate and level the playing field in challenges of government policies, but lawyers warn it raises new questions over what rules courts must follow and how judges will implement them.
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June 28, 2024
Problems Linger Amid Efforts To Clean Up Debt Firm's Mess
After the collapse of a California debt relief firm last year amid allegations of fraud, a bankruptcy judge signed off on a plan to allow a new firm to begin providing services for thousands of affected clients. While the new firm has promised to clean up its predecessor’s mess, some consumers say little to nothing has changed, and now enforcement agencies including the Consumer Financial Protection Bureau have started asking questions.
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June 28, 2024
Mercon Coffee Given More Time To Explain Insider Releases
At its confirmation hearing Friday, Mercon Coffee Corp. said it needs more time to brief a New York bankruptcy judge on why certain employees are eligible for releases that were meant to keep them at the company.
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June 28, 2024
Ex-NS8 Exec Was 'Willing Participant' In Fraud, Trustee Says
The litigation trustee in defunct cybersecurity startup NS8's Chapter 11 said co-founder David Hansen must return over $5 million to the bankruptcy estate, alleging in a lawsuit in the Delaware bankruptcy court that Hansen knew about and helped cover up years of fraud by the firm's former CEO that cost investors more than $100 million.
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June 28, 2024
Girardi's Ch. 7 Evidence Fight May Raise Novel Issues
Tom Girardi told a California federal judge that FBI agents violated his constitutional rights by obtaining evidence from his law firm's bankruptcy trustee without a search warrant, an argument that, if successful, could hamstring prosecutors in his upcoming wire fraud trial and shake up law enforcement's dealings with trustees.
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June 28, 2024
US Logistics Liquidation Comes Amid Industry Headwinds
A lender cutting off funding may have been the direct cause of trucking company U.S. Logistics Solutions Inc. filing for Chapter 7 liquidation in Texas, but it came amid a challenging environment for truck carriers.
![FILE - The sign for Norwood Hospital, a Steward Health Care hospital, is seen, June 29, 2020, in Norwood, Mass. Steward Health Care said it plans to sell off all its hospitals after announcing on Monday, May 6, 2024, that it filed for bankruptcy protection. (AP Photo/Steven Senne, File)](https://assets.law360news.com/1852000/1852052/7333b0ed8d60744971ca1c7ea9112de355925f78-health_care_troubles_51232.jpg)
Steward Health Downfall Prompts Calls For Tighter Regs
The magnitude of the financial troubles plaguing bankrupt hospital operator Steward Health Care has turned the Chapter 11 case into a flash point that should prompt a regulatory overhaul, according to a new report released by advocacy group Private Equity Stakeholder Project.
![Volunteer Nebraska architecture students build a tower at the Children's Museum in Lincoln, Neb., on Saturday, April 6, 2013 during a practice for next Saturday's attempt to break the Guinness Book record for largest structure made of Lincoln logs. The group has about 10,500 usable logs right now and are hoping to make the State Capitol abstract 12 feet high. (AP Photo/The Journal-Star, ) LOCAL TV OUT; KOLN-TV OUT; KGIN-TV OUT; KLKN-TV OUT](https://assets.law360news.com/1854000/1854415/4b9e873c822d17e44d3147d1645fcfede909c8c7-daily-life-nebraska.jpeg)
Toys R Us Failure Started Toymaker Basic Fun On Ch. 11 Road
Basic Fun, a company that picked up such iconic toy brands as Lincoln Logs, Tinker Toys and Uncle Milton Ant Farm in distress sales, was itself started on the road to its Chapter 11 filing by the bankruptcy of toy retail giant Toys R Us, according to court filings.
![WASHINGTON - JUNE 27: Visitors file into the U.S. Supreme Court buidling before the court handed down three decisions on Tuesday, June 27, 2023. (Bill Clark/CQ Roll Call via AP Images)](https://assets.law360news.com/1853000/1853460/65f1f9f6e4a1d74a667eadc93110f45e85b2c614-supreme_court_63746.jpg)
Purdue Ruling Fallout, Rite Aid Confirms Ch. 11 Plan
A long-awaited decision by the U.S. Supreme Court struck down nonconsensual third-party releases in the bankruptcy of Purdue Pharma LP, sending the bankruptcy bar toward a rethinking of the entire process of resolving mass torts through bankruptcy; pharmacy chain Rite Aid confirmed its Chapter 11 plan; and FTX Trading got court approval for its disclosure statement.
Expert Analysis
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Purdue Ch. 11 Ruling Reinforces Importance Of D&O Coverage
The U.S. Supreme Court's recent decision in Harrington v. Purdue Pharma, holding that a Chapter 11 reorganization cannot discharge claims against a nondebtor without affected claimants' consent, will open new litigation pathways surrounding corporate insolvency and increase the importance of robust directors and officers insurance, says Evan Bolla at Harris St. Laurent.
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Atty Well-Being Efforts Ignore Root Causes Of The Problem
The legal industry is engaged in a critical conversation about lawyers' mental health, but current attorney well-being programs primarily focus on helping lawyers cope with the stress of excessive workloads, instead of examining whether this work culture is even fundamentally compatible with lawyer well-being, says Jonathan Baum at Avenir Guild.
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Parsing Justices' Toss Of Purdue's Controversial Ch. 11 Plan
The U.S. Supreme Court's recent nixing of OxyContin manufacturer Purdue Pharma's Chapter 11 proposal prevents the Sackler family from settling thousands of civil opioid lawsuits without the consent of all of the plaintiffs, and holds profound implications for bankruptcy cases, say attorneys at MoloLamken.
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Del. Bankruptcy Ruling Will Give D&O Insureds Nightmares
In Henrich v. XL Specialty Insurance, the Delaware Bankruptcy Court recently found that a never-served qui tam claim had been "brought" before a D&O policy's retroactive date, thereby eliminating coverage, and creating a nightmare scenario for directors and officers policyholders facing whistleblower claims, says David Klein at Pillsbury.
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No Matter The Purdue Ruling, Mass Tort Reform Is Needed
The U.S. Supreme Court will soon issue its opinion in the bankruptcy of Purdue Pharma LP, and regardless of the outcome, it’s clear legal and policy reforms are needed to address the next mass tort, says William Organek at Baruch College.
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How Associates Can Build A Professional Image
As hybrid work arrangements become the norm in the legal industry, early-career attorneys must be proactive in building and maintaining a professional presence in both physical and digital settings, ensuring that their image aligns with their long-term career goals, say Lana Manganiello at Equinox Strategy Partners and Estelle Winsett at Estelle Winsett Professional Image Consulting.
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Insurers Have A Ch. 11 Voice Following High Court Ruling
The U.S. Supreme Court's recent ruling in Truck Insurance Exchange v. Kaiser Gypsum — which reaffirmed a broad definition of "party in interest" — will give insurers, particularly in mass tort Chapter 11 bankruptcies, more opportunity to protect their interests and identify problems with reorganization plans, says George Singer at Holland & Hart.
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Considerations For Cooperation Contracts In Loan Trades
Significant challenges to settling trades can arise when lenders of syndicated bank loans enter into defense-oriented cooperation agreements, which are growing in popularity, but working through these issues on the front end of a trade can save hours down the road, says Robert Waldner at Crowell & Moring.
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Firms Must Rethink How They Train New Lawyers In AI Age
As law firms begin to use generative artificial intelligence to complete lower-level legal tasks, they’ll need to consider new ways to train summer associates and early-career attorneys, keeping in mind the five stages of skill acquisition, says Liisa Thomas at Sheppard Mullin.
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Think Like A Lawyer: Always Be Closing
When a lawyer presents their case with the right propulsive structure throughout trial, there is little need for further argument after the close of evidence — and in fact, rehashing it all may test jurors’ patience — so attorneys should consider other strategies for closing arguments, says Luke Andrews at Poole Huffman.
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9th Circ. Clarifies ERISA Preemption For Healthcare Industry
The Ninth Circuit's recent ruling in Bristol SL Holdings v. Cigna notably clarifies the broad scope of the Employee Retirement Income Security Act's preemption of certain state law causes of action, standing to benefit payors and health plan administrators, say attorneys at Troutman Pepper.
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NY Combined Hearing Guidelines Can Shorten Ch. 11 Timeline
The Southern District of New York’s recently adopted guidelines on combining the processes for Chapter 11 plan confirmation and disclosure statement approval may shorten the Chapter 11 timeline for companies and reduce associated costs, say Robert Drain and Moshe Jacob at Skadden.
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A Healthier Legal Industry Starts With Emotional Intelligence
The legal profession has long been plagued by high rates of mental health issues, in part due to attorneys’ early training and broader societal stereotypes — but developing one’s emotional intelligence is one way to foster positive change, collectively and individually, says attorney Esperanza Franco.