U.S. Court of Appeals for the Third Circuit

In ruling a motion to dismiss, the Third Circuit Court of Appeals considered whether the purchaser of the Debtors’ shares post-confirmation was bound by releases contained in the plan of reorganization (the “Plan”).  A copy of the opinion is available here.

The Plan included “broad releases of liability,” that protected the Debtor and its

Official Committees’ of Unsecured Creditors can, and often do, have significant impacts on cases under chapter 11 of the Bankruptcy Code.  Appointed pursuant to Section 1102 of the Bankruptcy Code, creditors’ committees ordinarily consist of creditors holding large claims against the chapter 11 debtor. The Bankruptcy Code (in, for example, Sections 1103 and 1104) provides

In PAH Litigation Trust v. Water Street Healthcare Partners, LP (In re Physiotherapy Holdings, Inc.), Case No. 13-12965 (KG), Adv. No. 15-51238 (KG), 2017 WL 5054308 (Bankr. D. Del. Nov. 1, 2017), the debtor entered into bankruptcy after a leveraged-buyout transaction (“LBO”).  After a plan was confirmed, a resulting litigation trust brought actual and constructive