American Bankruptcy Institute
iv
V. Proposed Recommendations: Administering the Case ......................................111
A. Executory Contracts and Leases ............................................................................................112
1. Definition of Executory Contract ........................................................................................................112 2. General Rights of Private Parties to Executory Contracts and Unexpired Leases ............115 3. Rejection of Executory Contracts and Unexpired Leases .............................................................119 4. Intellectual Property Licenses ...............................................................................................................122 5. Trademark Licenses ......................................................................................................................................126 6. Real Property Leases ...................................................................................................................................129
B. Use, Sale, or Lease of Property of the Estate .......................................................................135
1. General Provisions for Non-Ordinary Course Transactions ......................................................135 2. Finality of Orders ........................................................................................................................................139 3. Transactions Free and Clear of Interests ...........................................................................................141 4. Credit Bidding ................................................................................................................................................146
C. Avoiding Powers ..........................................................................................................................148
1. Preference Claims .........................................................................................................................................148 2. Recoveries Under Section 550 ...................................................................................................................151
D. Labor and Benefits .....................................................................................................................156
1. Collective Bargaining Agreements Under Section 1113 ................................................................156 2. Retiree Benefits and Section 1114 ...........................................................................................................166
E. Administrative Claims ...............................................................................................................169
1. Section 503(b)(9) and Reclamation .........................................................................................................169 2. Administrative Claims Committee .........................................................................................................173 3. WARN Act Claims ..........................................................................................................................................174 4. Severance Benefits .......................................................................................................................................177
F. General Valuation Standards ...................................................................................................180 G. Standard for Reviewing Settlements and Compromises ....................................................183 H. The In Pari Delicto Doctrine ...................................................................................................186
VI. Proposed Recommendations: Exiting the Case ...................................................193
A. General Authority of Debtor in Possession and Its Board of Directors .......................194
1. Preemption and the Authority to Approve Transactions and Plan .........................................194 2. Role of Debtor in Plan Process ...............................................................................................................197
B. Approval of Section 363x Sales ................................................................................................201 C. Value Determinations, Allocation, and Distributions ......................................................207
1. Creditors’ Rights to Reorganization Value and Redemption Option Value ..........................207 2. New Value Corollary ..................................................................................................................................224 3. Section 506(c) and Charges Against Collateral ..............................................................................226 4. Section 552(b) and Equities of the Case ................................................................................................230 5. Cramdown Interest Rates ..........................................................................................................................234 6. Class-Skipping and Intra-Class Discriminating Distributions ....................................................237