Philadelphia and Wilmington partner Andy Kassner and associate Joe Argentina published an article in The Legal Intelligencer titled, “Third Circuit Addresses Structured Dismissal of Bankruptcy Case.”
The article discusses an alternative solution to companies filing for Chapter 11. Disputes between the debtor and its primary creditor constituencies have been resolved by the debtor requesting a “structured dismissal” of the case to implement the settlement outside of the bankruptcy process.
The issue of whether a bankruptcy court should approve a structured dismissal when the distribution of proceeds under the terms of the settlement would not comply with provisions of the Bankruptcy Code had the settlement been proposed under a chapter 11 plan of reorganization was recently addressed by the Third Circuit Court of Appeals in the matter of In re Jevic Holding Corp., No. 14-1465 slip op. (3d Cir. May 21, 2015). In this case, in a split 2 – 1 decision, the court held that the structured dismissal of a bankruptcy case that does not adhere to the Bankruptcy Code’s priority scheme is nevertheless permitted in rare instances when virtually no other option is available.
To view the entire article, click here.