Category: Corporate Bankruptcy

  • Chapter 11s Did Not Spike in July 2025

    Posted by

    Bob Lawless

    There were a number of reports that commercial chapter 11 filings jumped dramatically in July 2025. Unfortunately, these headlines appear to be from junk data and from sources that should know better such as the American Bankruptcy Institute and Epiq AACER. From working with both organizations in the past, I know they value accuracy. This post is a plea to do better.

    The headlines are that commercial chapter 11 filings in July 2025 jumped 78% on a year-over-year basis. Supposedly, there were 911 commercial chapter 11s in July 2025 compared with only 512 in July 2024. Amid all the concerns about our national economy, that would be a notable increase if only it was true. Of those 911 new chapter 11s, almost a third were from the Genesis Healthcare bankruptcy. Ironically, Epiq is the claims agent and keeper of the public docket for the case. When a corporate group files bankruptcy, each one of its affiliates files its own bankruptcy petition. There is no connection between how the corporate group is organized and the size of the case. For example, the similarly sized Del Monte Foods filed bankruptcy with only 18 companies in its corporate group.

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  • The 23andMe Court Got It Right; Is that Wrong?

    Posted by

    Bob Lawless

    The bankruptcy court approved 23andMe's motion to sell its assets in its chapter 11 case. Those assets include the genetic information its customers had entrusted to the company. Understandably, many customers and government regulators had concerns about the deal. In the end, Judge Walsh got it right on the law. 

    All that was at issue in the motion before Judge Walsh was whether 23andMe satisfied the requirements to sell assets in bankruptcy. The consumer privacy ombudsman suggested restrictions on the transfer of its customers' genetic information. Those restrictions might serve the common weal, but Judge Walsh had to stick to the law Congress had given him. That law is a textual mess. The intentionalism and purposivism on display in the opinion cuts through the textual problems. There is a lot to the opinion, but for now I will just focus on the section 363 issue.

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  • Is Greenpeace Heading for Bankruptcy?

    Posted by

    Adam Levitin
    [Updated 3/26/25:  I jumped the gun here; it's an occupational hazard of blogging.
     
    It turns out that the North Dakota Rules of Civil Procedure are not the only North Dakota law on supersedeas bond requirements. Tucked away among the Century Code's provisions about the technical mechanics of execution and levy by sheriffs is a provision in the North Dakota Century Code that places a dollar limit on the supersedeas bond requirement. It limit the aggregate supersedes bond requirement for all defendants in a case to $25 million. That seems like a much more achievable figure for Greenpeace. as far as I can tell, the bonding limit came out of tort reform efforts. Who would have expected it to benefit an environmental group?
     
    Assuming that the North Dakota courts follow the $25 million bond limit, I would expect Greenpeace to be able to post the bond, in which case bankruptcy would not be needed.]
     
    It appears that the terminus of the Dakota Access pipeline is…Chapter 11. That's where I believe Energy Transfer's $660 million trespass and defamation verdict against Greenpeace in North Dakota state court is going to end up. Although Greenpeace is vowing to appeal the verdict, that's just a brave face. Greenpeace won't be able to post the supersedeas bond, and its US entities, at least, will likely end up filing for bankruptcy.  
     

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  • Juliet Moringiello – One of the Greats

    Posted by

    Melissa Jacoby

    Juliet Moringiello was an amazing person. Her alchemy of brain and spirit and energy and heart and common sense made a positive difference for so many people, across disparate places and professions. She could teach you how to navigate a commercial law and to downhill ski.

    Testaments from Widener University Commonwealth Law School and professional organizations illustrate how Juliet served academic and legal communities with distinction. Examples include the Uniform Law Commission (including an instrumental role in the development of the 2022 amendments to the Uniform Commercial Code), American Law Institute projects, and as a scholar-in-residence for the American Bankruptcy Institute. Juliet did these things while also serving in critical leadership roles at Widener and offering engaged and committed classroom teaching, including first-year property law and an array of upper level classes and seminars. 

    Chris Odinet's memorial captures beautifully Juliet's commitment to helping others and building communities. As reflected in the mentoring award she recently received from the Commercial and Consumer Law Section of the Association of American Law Schools, Juliet did so much behind the scenes to lift up others and to help them improve their research and analysis. 

    Juliet was ideally positioned for mentoring because her own scholarship was creative and wide-ranging and yet reflected care and attention to detail. She offered important insights on municipal bankruptcy and related state law procedures. Whereas scholars and jurists long have referred to the "Butner principle" in the abstract, Juliet closely studied the case for which the principle is named, which turned out not to match how it was remembered. She explored poorly drafted statutory language that since 2005 has affected the treatment of car loans in Chapter 13 repayment plans for individuals and proposed an analytical framework accordingly. These are just a few of the examples of her writings in which a reader can find careful and sustained attention to the relationship between state and federal law. 

    With respect to state secured transactions law, Juliet comfortably traversed the border between real property and personal property. The problems dwelling from the tangible-intangible divide of personal property particularly attracted her attention. She explored puzzles that arise, for example, when one tries to apply fundamental concepts such as possession to remotely controlled activities.

    And those projects dovetailed with Juliet's longstanding interest in understanding emerging technologies, and her ability to demystify how foundational commercial law concepts can be squared with innovation – from software licensing agreements and electronic contracting, to cyberspace and domain names and Second Life, to non-fungible tokens. As popular subjects for scholarship, writings on hot tech topics risk ephemerality. Juliet's work is built to last. She made these issues accessible while demonstrating how they could and should be situated in broader legal frameworks.

    Of course, these professional interests were part of a rich multi-faceted life of family and friends, of appreciating the sights and nature in Pennsylvania, in Quebec, and anywhere and everywhere she traveled. When there wasn't enough snow for skiis, you might find her on a hike. Or on a bike. Or a paddleboard. 

    Juliet Moringiello offers inspiration to do impactful work, to help others, and to spend time on the the things you love. Deepest condolences to her family. 

  • Serta Simmons Uptier: Implications

    Posted by

    Adam Levitin
    We now have the first major Court of Appeals decision on a liability management transaction. On the last day of 2024, Judge Andy Oldham of the 5th Circuit issued a very thoughtful and thorough opinion regarding the Serta Simmons uptier transaction and subsequent bankruptcy plan. (I have fond memories of Andy looking like a deer in the headlights on the 1st day of 1L Contracts when he was asked "What's an assumpsit?" by a certain former co-blogger…) Although the opinion is an important punctuation point, I don't think it will itself fundamentally change the use of liability management transactions; there's really little downside from pursuing them and potentially plenty of upside.
     

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  • If You’re Gonna File in Texas, You Gotta Have Your Votes in Hand

    Posted by

    Adam Levitin

    J&J’s at it again with a third talc bankruptcy filing, this time in SDTX.  To paraphrase Marx, the first time was tragedy, the second time farce, and now the third time is fubar. 

    Why fubar? tl;dr is that J&J's betting the case on the purported authority of a small Mississippi plaintiffs' firm to unilaterally change the votes of its joint clients from "no" to "yes". 😮🤯

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  • Preliminary Injunctions After Harrington v. Purdue Pharma

    Posted by

    Adam Levitin

    The Supreme Court's opinion in Harrington v. Purdue Pharma left open a lot of questions about the extent of its scope. We now have one of the first opinions exploring those questions. Judge Craig Goldblatt of the Delaware bankruptcy court faced a request for a preliminary injunction in the bankruptcy of right-wing social media platform Parler. Judge Goldblatt concluded that "authority to 'extend the stay' survives Purdue Pharma." I'm skeptical. 

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  • Procedural Justice and Chapter 11 Venue

    Posted by

    Bob Lawless

    The good people at Bloomberg News asked if I wanted to elaborate on a post I did about procedural justice and chapter 11 forum shopping. The resulting opinion piece is here: "Bankruptcy Venue Shopping Breaks Perceptions of Judicial Fairness." It should not be behind a paywall.

    The piece builds on the procedural justice literature about the noninstrumentalist concerns that drive perceived legitimacy of a legal system. It is easy to find a court decision legitimate when the court rules in your favor, or as a nonparty, you agree with it. For the legal system to work, parties have to respect decisions they don't agree with. Fortunately, social scientists have told us a lot about what drives perceptions of judicial legitimacy.

    Spoiler alert: picking your own judge ain't it.

  • Unjust Debts on the Road

    Posted by

    Melissa Jacoby

    Unjust_debts_finalFirst, thanks to Bob Lawless for his post about my new book. It has been great to engage with people about Unjust Debts so far, and especially appreciated the book making a new Financial Times best books list (links to that and other coverage here). Wanted to note a few upcoming book events for Credit Slips readers:

    • June 27 (TONIGHT): Greenlight Bookstore, Brooklyn NY, in conversation with Zephyr Teachout. Information and RSVP here. 
    • July 1 (VIRTUAL): Commonwealth Club World Affairs, in conversation with Senator Elizabeth Warren. Information and registration here. 
    • July 8: Politics & Prose, Washington DC, in conversation with Vicki Shabo. Information here. 

  • Not All Third-Party Releases Are the Same

    Posted by

    Adam Levitin

    My friend Professor Tony Casey has been the most vocal academic defender of non-consensual non-debtor releases in bankruptcy. I obviously disagree with Tony on both the legality and policy substance, but Tony's repeatedly taken me to task in scholarship (here and here) and various social media platforms (here and here) for having supposedly changed my view of the issue.

    Tony's charge that I've flip-flopped is based on a 2019 blog post in which I defended then presidential candidate Elizabeth Warren's work in Dow Corning, which Tony thinks is a non-consensual non-debtor release case. 

    Unfortunately, Tony's misread Dow Corning and therefore sees a contradiction where none exists.  I have never taken issue with consensual releases of creditors' claims against non-debtors as part of a global settlement (although what constitutes adequate consent is a separate issue). Instead, my concern has always been with mandatory, non-consensual release of claims against non-debtors. Dow Corning released third-parties, but it was not a non-consensual release case. Unlike in, say, Purdue Pharma, where the non-debtor releases purport to bind all creditors irrespective of consent, the dissenters in Dow Corning were allowed to opt-out and pursue their remedies.

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