United States: Insolvency/Bankruptcy/Re-Structuring

David L. Zive and Jacob E. Trachtenberg examine the distressed note sale market from both buyer and seller perspectives, analyzing the legal and transactional frameworks that govern these complex transactions. The article provides practical guidance for navigating the current market landscape and understanding the key considerations in distressed debt transactions.

When sophisticated parties to a restructuring agreement provide that a fee is triggered if a debtor “raises, or “commits to raise” alternative financing, does the word “commits” require a binding contractual obligation or something less? The First Department addressed this very question in a recent decision entitled Aurelius Capital Master Ltd. v Hertz International Limited, 2026 NY Slip Op 05369 (1st Dept Sept. 22, 2026). The 4-1 decision affirmed a post-trial judgment of approximately $15.9 million in favor of holders of unsecured notes issued by a Hertz affiliate, holding that “commits to raise” encompasses significant affirmative steps toward securing alternative financing, even absent a binding agreement.

Chapter 11 debtors have multiple pathways to exit bankruptcy, including plan confirmation, asset sales, dismissal, or conversion to Chapter 7 liquidation. Understanding how these mechanisms interact and can be sequenced is essential for practitioners developing effective exit strategies. This practice note examines the legal and practical considerations associated with each exit pathway.

David L. Zive and Jacob E. Trachtenberg examine the distressed note sale market from both buyer and seller perspectives, analyzing the legal and transactional frameworks that govern these complex transactions. The article provides practical guidance for navigating the current market landscape and understanding the key considerations in distressed debt transactions.

The Texas Business Court addressed whether parties could circumvent an existing district court receivership by filing a new action in the Business Court. In Parker v. Lynzara-Austin Real Estate Management, LLC, Judge Stacy Rogers Sharp examined the jurisdictional boundaries between the Business Court and district courts when a receivership is already in place, clarifying the scope of exclusive jurisdiction under Texas law.

Chapter 11 debtors have multiple pathways to exit bankruptcy, including plan confirmation, asset sales, dismissal, or conversion to Chapter 7 liquidation. Understanding how these mechanisms interact and can be sequenced is essential for practitioners developing effective exit strategies. This practice note examines the legal and practical considerations associated with each exit pathway.