Wednesday December 7th, 2016 the U.S. Supreme Court heard arguments in the case Czyzewski v. Jevic Holding Corporation (a Delanco, NJ based company). http://www.nytimes.com /2016/12/06/ business/dealbook/ supreme-court-case- has-bankruptcy- world-on-edge.html?_r=0 This case questions the need for ‘absolute priority rules’ in Chapter 11 bankruptcy cases, which protect intermediate creditors from losing claims on assets to senior and junior creditors. Intermediate creditors include Jevic Holding Corporation’s 1,785 workers (drivers) and the $8MM in pay owed to these workers. Nineteen law professors signed a ‘friend-of-the-court brief’ urging the Supreme Court to side with Jevic’s workers and maintain ‘absolute priority rules’. Opponents of ‘absolute priority rules’ argue paying small creditors fractions of their claims could be in the best interests of a majority of the company’s creditors. This argument persuaded a bankruptcy judge and a divided panel of the U.S. Court of Appeals for the Third Circuit.
(Libby Lewis) http://www.nytimes.com/2016/12/06/business/dealbook/supreme-court-case-has-bankruptcy-world-on-edge.html?_r=0