Buckley Brion Attorneys Obtain Precedent-Setting Decision

On September 26, 2013, Buckley Brion attorneys successfully obtained a precedent setting decision for their clients in the United States Bankruptcy Court for the Eastern District of Pennsylvania on an issue of first impression within the Third Circuit – whether the absolute priority rule applies to an individual Chapter 11 debtor after the Bankruptcy Abuse Prevention & Consumer Protection Act (“BAPCPA”) of 2005, which amended the Bankruptcy Code.

Judge Fox held that the absolute priority rule still applies, explaining that “individual Chapter 11 debtors who fail to obtain the consent of an impaired class of creditors cannot retain prepetition non-exempt property unless the dissenting creditor class will receive distributions under the proposed plan equal in value, as of the plan effective date, to the amount of its claims.”

The dismissal of a Debtors’ bankruptcy case in the United States Bankruptcy Court for the Eastern District of Pennsylvania allows the firm’s clients to pursue their state law claims against the Debtors for the entire amount due and owing to them.

A copy of Judge Fox’s opinion can be obtained upon request.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *