Substantive Consolidation Update: Third Circuit Reverses District Court’s Negation of Guarantees
by Douglas E. Deutsch and Christy L. Rivera, Chadbourne & Parke LLP, New York
In October 2004 the District Court of Delaware issued a controversial decision in the Owens Corning bankruptcy case that substantively consolidated certain subsidiaries of Owens Corning into its bankruptcy estate. See In re Owens Corning, 316 B.R. 168 (D. Ct. Del. 2004) (hereafter, the “district court” decision). The decision was appealed. Last week, the U.S. Court of Appeals for the Third Circuit reversed the district court. See In re Owens Corning, ---F.3d.---, 2005 WL 1939796 (3d. Cir. 2005) (hereafter, the “circuit court” decision). Following a brief review on the law of substantive consolidation and the district court’s opinion, we provide our review and analysis of the Third Circuit’s decision below.
YNMC Leadership Changes
The Young and New Members Committee is happy to announce that, following the 2005 Annual Spring Meeting, Melissa Kibler Knoll was named ABI Vice President—Membership (and retired from her role as YNMC co-chair), Nir Gabriely was appointed as a new co-chair of YNMC, and Brian Shaw was named to the ABI board of directors.
Melissa has been a co-chair and the driving force behind the YNMC for the past five years. Among other things, Melissa was instrumental in creating the “Nuts & Bolts” programs and numerous YNMC-sponsored programs. Melissa (Mesirow Financial Consulting LLC, Chicago) has been very active with ABI for years. Congratulations to her on a well-deserved promotion!
Nir Gabriely is in charge of the restructuring group at Brown Gibbons Lang & Co. (BGL), an independent investment bank serving middle-market companies. He has been an active member of ABI since 2001. In recent years, Nir has been involved in many middle market distressed transactions representing debtors, unsecured committees and senior lenders. Nir is located in Cleveland. We welcome Nir!
Finally, we are happy to report that Brian Shaw, a co-chair of YNMC for the last three years, was appointed to ABI’s board of directors in April. Joining the board of directors was a welcome reward for Brian, an attorney with Shaw Gussis Fishman Glantz Wolfson & Towbin LLC (in Chicago), following his many years of service to ABI and the YNMC.
Agenda for the 2005 Winter Leadership Conference
At the 2005 Winter Leadership Conference in Indian Wells, Calif., the Young and New Members Committee will present a discussion (Thursday, Dec. 1, at 4:30 p.m.) on evidentiary issues that have come to the forefront during the new (and young) millennium. Issues to be discussed will include the use of electronic evidence, privilege and admissibility issues regarding e-mail, text messages and other high-tech issues. A program designed to help professionals adjust to ever-changing technology, it is a must-attend for those technologically savvy professionals, and those not so savvy as well.