January 14, 2019 articles around the web describe PG&E moving to file chapter 11 due to risks and potential liabilities. One of the articles, at the WSJ, describes PG&E equipment as playing a role in some 1,500 fires, some massive. As with numerous past filers of chapter 11, one of the key problems is failure to… Continue Reading
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State Law Property Rights – What are They?
Posted in Asbestos Bankruptcy, Bankruptcy, Policy IssuesWhat are property interests; how do we know them when we think we see them? That’s a fascinating question that’s been animating due process and takings case law for many decades. Board of Regents v. Roth, 408 US 564 (1972), was one of the key cases in the area when I was a young lawyer, and remains important today.… Continue Reading
Takata Is Headed for Chapter 11 Due to Exploding Air Bags
Posted in BankruptcyIt’s been a long time coming, but it appears Takata is now headed for chapter 11 to address the many problems arising from its exploding airbags, as explained in a June 15, 2017 article from Reuters. If the numbers in the article are accurate, this could prove an interesting contrast to the typical “mass tort”… Continue Reading
Equitable Mootness – Yet Another Due Process Violation in Chapter 11 Proceedings
Posted in Bankruptcy, Due ProcessEvery litigant faces the possibility of trial and appeal. But Wall Street finds that risk annoying. So, bankruptcy courts invented the doctrine of “equitable mootness” to cut off appeals. The doctrine is still alive and kicking in the east coast circuits, but took at least a flesh wound in a recent Ninth Circuit ruling. The… Continue Reading
Lyondell Claims Benzene Claims are Barred by Prior Chapter 11 Plan and Injunction
Posted in Asbestos Bankruptcy, Bankruptcy, Benzene, Constitutional Law/Mass Tort Law, Litigation IndustryDefendants related to uber-sized Lyondell Chemical are now seeking to use a recent chapter 11 injunction to try to bar claims that benzene caused a blood cancer. The defense motion makes no mention of the chapter 11 proceeding including any “futures representative” type of person acting on behalf of future claimants. The motion also makes… Continue Reading
SCOTUS and Bankruptcy Court Jurisdiction Regarding Adjudication of Claims Related to Mass Tort Bankruptcies
Posted in Asbestos Bankruptcy, Bankruptcy, Litigation Industry, Mass Tort IssuesThe Stern related opinions continue from SCOTUS. It will be interesting to see the impact for mass tort bankruptcies. A May 26, 2015 article from LAW360 explains: “Law360, New York (May 26, 2015, 10:33 AM ET) — The U.S. Supreme Court ruled Tuesday that bankruptcy courts have the authority to make final decisions on certain… Continue Reading
“The Computer Did It” Is NOT a Legal Defense, At Least In Bankruptcy Court
Posted in Bankruptcy, Humor, OfftopicEver had an idiotic business tell you: “Not our fault – the computer did it? ” Say, for example, maybe an irresponsible company such as CapitalOne? A federal bankruptcy judge recently ruled that “the computer did it” is NOT a legal defense to a charge of violating the automatic stay rule. That outcome of course… Continue Reading
Bankruptcy Court Secrecy – the Apple Version
Posted in Bankruptcy, SecrecyHow about a secret chapter 11 proceeding, to benefit Apple’s penchant for secrecy? The issues are arising in the context of a chapter 11 filing by a would-be supplier to Apple of sapphire glass, GT Advanced. The secrecy sought for Apple seems contrary to law, and contrary to demands by the US Chamber of Commerce… Continue Reading
Confused About Detroit – Bloomberg Has Some Answers
Posted in BankruptcyBloomberg has a helpful September 2, 2014 article by Steven Church on the legal and social issues in the Detroit bankruptcy case now heading into trial.… Continue Reading
Update on the Federal Loss on GM – and Relevance to the GM Switch Issues
Posted in Bankruptcy, GM Bk, Litigation Industry, Mass Tort IssuesApril 30, 2014 news reports say that the US treasury now reports losing $11.2 billion on the GM takeover fiasco, and has written off its “investment” in old GM. (See below for cut and paste.) The government obviously went into the “deal” knowing that the big picture was that jobs and industries would be saved, but… Continue Reading
Bankruptcy Courts – Plenty of Chutzpah To Get the Debtor Out – But Later, Not So Much
Posted in BankruptcyChapter 11 bankruptcy courts never cease to amaze. Until the debtor is out of chapter 11, they claim immense power. Thus, this post from the Weil bankruptcy blog describes a case in which the court decided to order the terms for a contract so that the debtor could exit bankruptcy. On the flip side, once the… Continue Reading
GM’s Ignition Switch Recall – A Prime Example of Why It’s Not Sound Policy to Let Bankruptcy Courts Cut Off Tort Claims
Posted in BankruptcyBy itself, the 2009 GM bankruptcy was a poster child for some of the many flaws in chapter 11 and bankruptcy law as used to handle contingent liability claims. See, for example, here, here, here, and here. That said, Bankruptcy Judge Gerber sometimes did draw a due process lines in terms of cutting off claims without notice and… Continue Reading
11th Archdiocese Files for Chapter 11; Catholic Church Aggregate Losses Said to Exceed $2.2 Billion
Posted in BankruptcyA Roman Catholic Diocese of Helena, Mont. is now the 11th archdiocese to file for chapter 11 to resolve sex abuses cases. According to a WSJ article, the US Catholic Conference of Bishops now pegs total sex abuse losses at over $2.2 billion. … Continue Reading
Canadian Bankruptcy Law Flexibility When Facing Mass Disasters
Posted in BankruptcyA new post at Weil’s Bankruptcy Blog includes commentary from Canadian lawyers on bankruptcy law flexibility when confronted with a mass disaster. In short, the recent mass rail disaster in Quebec produced an unexpected set of issues when the rail line sought bankruptcy protection. But under a quirk of old statutory law, railroads were excluded… Continue Reading
D&O Insurance in Bankruptcy
Posted in BankruptcyThe D&O Diary includes a new post that provides a useful overview of the use and abuse of D&O in bankruptcy. … Continue Reading
D & O Insurance in Bankruptcies
Posted in BankruptcyD & O Diary includes a useful new summary post on the use and/or abuse of D&O insurance in bankruptcy. … Continue Reading
“Alter Ego” Issues are Not Core Bankruptcy Issues, At Least in the 7th Circuit
Posted in BankruptcyFor both substance and style (breezy and brief, with some dry wit), it’s hard to beat Weil Gotshal’s Bankruptcy Blog. And, now, a new post at the blog brings a "Stern" update through a 7th Circuit case especially relevant to mass tort lawyers who find their clients more frequently intersecting with bankruptcy courts. As a… Continue Reading
Oklahoma Passes Legislation Aimed at Creating Intersections Between the Tort System and the Bankruptcy Claiming System
Posted in BankruptcyAsbestos defendants continue to convince state legislatures to create some long overdue intersections between personal in jury claims in te the tort system and in the bankruptcy trust claiming system. The most recent outcome is in Oklahoma, where legislators approved this new statute. The governor is expected to sign the bill. The new statute is… Continue Reading
A Canadian View on the Enforceability of Contract Clauses that Operate Upon Insolvency or the Filing of a Bankruptcy Petition
Posted in BankruptcyBankruptcies are frequently used to resolve mass tort situations. In some instance, a bankruptcy is fairly foreseeable as tort claims grow. Therefore, a pertinent question is whether or when bankruptcy courts will enforce or strike out contract clauses that purport to operate upon the filing of bankruptcy petition or insolvency. A recent case in Canada… Continue Reading
Ted Olson’s Fee – $1,800 Per Hour for Bankruptcy Work
Posted in BankruptcyThe story is here on the WSJ Law Blog. Mr. Scalia (the younger) knocks down $ 980. per hour. … Continue Reading
Will Bankruptcy Legislation Oust the Bankruptcy Courts of Delaware and New York
Posted in BankruptcyThe bankruptcy courts of Delaware and New York dominate major chapter 11 cases, to the great delight of lawyers in those areas. But the work of the courts has been oft-criticized as far too pro-debtor, with the Delaware courts receiving especially blunt criticism. See Professor Lynn LoPucki’s 2005 book: Courting Failure: How Competition for Big Cases… Continue Reading
Chapter 11 – Just Another Financial Management Tool – Will the Law Ever Catch Up ?
Posted in BankruptcyAs described here and here by DealBook, American Airlines has now joined the parade of airlines taking their second (or third) cleansing bath in the waters of chapter 11. Once upon a time, a chapter 11 filing was considered a stain on the image of a corporation and its executives. But today, with the rise of… Continue Reading
MF Global’s $ 600 Million Fiasco – The Latest Example of the Intersections Between Bankruptcy and Mass Claiming – See Dealbook for Specifics
Posted in BankruptcyThe MF Global fiasco has left $ 600 million missing, and 38,000 customer accounts being scrutinized as to what happened. Tort and contract claims will follow, and/or are pending, subject to the bankruptcy stay of all litigation. What to do? Once again, as is true for many mass claims, chapter 11 is the primary vehicle… Continue Reading
Global Forum Shopping – Shipping Companies Seek Shelter in U.S. Chapter 11 Proceedings
Posted in BankruptcyU.S. bankruptcy judges purport to wield vast power, such as issuing purportedly global stays of all litigation pending against a debtor. Some would say that due process is improperly tossed out the door in such proceedings, but others would argue to the contrary. The market place suggests that the broad orders are desired by debtors,… Continue Reading