LexisNexis Emerging Issues, 2017 Emerging Issues 7529

In a majority decision authored by Justice Breyer, the United States Supreme Court answers in the negative “the basic question” whether a bankruptcy court can “approve a structured dismissal that provides for distributions that do not follow ordinary priority rules without the affected creditors’ consent,” holding that a “distribution scheme ordered in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the primary mechanisms the Code establishes for final distributions of estate value in business bankruptcies.”

This commentary analyzes the holding and implications of the Jevic opinion.