Philadelphia partner Jacob Cohn, a member of Gordon & Rees’s Bankruptcy, Restructuring and Creditors’ Rights Practice Group, coauthored the lead cover article for the December 2016 American Bankruptcy Institute Journal (Winter Leadership Edition). The article, “Caveat Emptor for § 363 Sales? Known Creditors, Successor Liability and Notice Issues from the GM Chapter 11 Case,” discusses the recent ruling of the United States Court of Appeals for the Second Circuit that “new” GM can be sued for defective ignition switches manufactured by “old” GM despite a bar order in a section 363 sale because GM failed to give actual notice to known creditors.
The article emphasizes the overriding importance for debtors to forthrightly identify all of their creditors, including foreseeable contingent creditors and provide them with actual notice wherever possible, and explains that the penalty for failing to do so is that the creditor that does not receive the required level of notice is not bound by res judicata to the bankruptcy court’s orders. The article further explains how the Second Circuit’s decision reinforces fundamental limits on the authority of bankruptcy courts to enjoin claims of future victims of pre-petition tortious conduct by a Chapter 11 debtor in furtherance of efforts to reorganize a company or maximize the value of a sale of its assets.
Notably, the GM case represents an application of the Second Circuit’s precedent in Travelers Cas. and Sur. Co. v. Chubb Indem. Ins. Co. (In re Johns-Manville Corp.), 600 F.3d 135 (2d Cir. 2010), a case that Mr. Cohn argued before the United States Supreme Court in an earlier phase, in which he successfully obtained a ruling that Chubb, as an unrepresented future claimant, could not be bound to the initial 1986 “channeling” injunctions in the groundbreaking Johns-Manville asbestos bankruptcy case.
Mr. Cohn has nearly 30 years of experience in all aspects of trial and appellate practice in state and federal courts. He handles a variety of complex, high-stakes cases and has obtained precedent-setting results for his clients in areas including insurance coverage, class action defense, bankruptcy, civil rights, and constitutional law. Mr. Cohn is rated AV® Preeminent™ by Martindale-Hubbell. He is also listed in The Best Lawyers in America© 2016, 2017* for insurance law, Pennsylvania Super Lawyers*, a Thomson Reuters publication, in the fields of Appellate, Bankruptcy, and Insurance Coverage, and is listed in Who’s Who Legal: Insurance & Reinsurance.
To read the article, please click here.
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