By Dan Prieto and Mark Douglas (October 6, 2021, 4:56 p.m. EDT) – This article discusses a recent opinion on structured layoffs.
In 2017, in Czyzewski v. Jevic Holding Corp., the United States Supreme Court has ruled that the Bankruptcy Code does not allow bankruptcy courts to approve distributions to creditors in a structured dismissal of a Chapter 11 case that violates the ordinary priority rules of the Bankruptcy Code without the consent of the creditors.
However, because the court declined to express any “opinion on the legality of structured dismissals in general”, the impact of the decision on such relief remains an open question.
In June, the US Bankruptcy Court for the Southern District of New York looked into this issue …
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