Lindsey Simon

Ultimately, the court concludes that prolonging bankruptcy churn (and further delaying stayed claimants) with a patently uncomfortable plan is not in the best interest of any involved. With one final nudge toward an out-of-court deal, the court turns the case away.

As to dismissal, the court is very careful to distinguish this case from LTL's two-part journey through New Jersey. Importantly, it finds that filing a case like this is not in bad faith, and resolving mass tort claims serves a valid bankruptcy purpose. 👀

Finally, the court denies confirmation because the debtor's plan purports to channel claims against non-debtors who face direct, not derivative, liability, like retailers. The court follows the 2d and 3rd circuits in reaching this assessment of Section 524(g)'s limit.

Additionally, the court denied confirmation due to inclusion of non-consensual, non-debtor releases. In the first opinion I've seen addressing this point, the court rejected the debtor's claim that this is a "full pay" case that is saved under SCOTUS's opinion in Purdue Pharma.

On the issue of confirmation, the court goes into great detail about various concerns with the prepetition voting. Process, timing, clarity, and more. I have much more to say on this, but for now know that the court could not certify the vote, which is required for confirmation.

Note that the opinion does two fundamentally different (and important) things: first, it denies confirmation of the debtor's plan of reorganization; and second, it outright dismisses the bankruptcy case.

The court looks at voting/solicitation issues, challenges with non-consensual non-debtor releases, divisional merger complications, and more.

"This case is different."

Massively consequential ruling out of Houston this evening: the bankruptcy court dismisses Red River Talc, LLC's (J&J pt. III) prepackaged bankruptcy case.