X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Corinne Ball

The last installment of this column covered two recent opinions from Delaware and Colorado Bankruptcy Courts addressing whether a bankruptcy court has subject matter jurisdiction and constitutional authority to approve non-consensual third-party releases as part of a plan confirmation process. See Corinne Ball, “Decisions Consider Bankruptcy Court’s Authority to Approve Third-Party Releases,” NYLJ (Oct. 26, 2017). Those two opinions—In re Millennium Lab Holdings II, Case No. 15-12284 (LSS), 2017 WL 4417562 (Bankr. D. Del. Oct. 3, 2017) and In re Midway Gold US, Case No. 15-16835 (MER), 2017 WL 4480818 (Bankr. D. Colo. Oct. 6, 2017)—suggested different approaches to determining whether the bankruptcy court has jurisdictional or constitutional authority to approve the releases. The Delaware Bankruptcy Court, on remand from the District Court to determine whether it had constitutional authority, once again confronted the continuing objection from claimholders who did not want to release non-debtors and concluded that dealing with claims purportedly released by a plan brings the matter within the subject matter jurisdiction and constitutional authority of the bankruptcy court, because the inquiry is made in the context of confirming a plan, which is a core proceeding. The Delaware Bankruptcy Court was addressing claims for which the debtor had exposure through indemnity obligations, thus giving rise to some “conceivable effect” on the estate. The Colorado Bankruptcy Court, on the other hand, held that while the releases were included within a proposed Chapter 11 plan, and “confirmation of plans” are expressly made a core proceedings, the court could not “permit third-party non-debtors to bootstrap their disputes into bankruptcy case in this fashion.” In this case, the potentially released claims did not arise under the Bankruptcy Code, and were not otherwise connected to the debtors, the property of the debtors’ estates or the administration of the Chapter 11 cases. The court further reasoned that the fact that the non-debtor released parties “may have contributed financially” to the proposed Chapter 11 plan was “insufficient alone for the Court to find it [could] exercise ‘related to’ jurisdiction” over the potentially released claims.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at customercare@alm.com

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2018 ALM Media Properties, LLC. All Rights Reserved.