In January 2024, the Third Circuit issued a decision in FTX Trading Ltd. that bankruptcy practitioners feared could have nationwide consequences for Chapter 11 proceedings. The Court found that, if certain statutory requirements are met, appointment of an examiner under section 1104(c) of the bankruptcy code is mandatory upon the motion of a party in interest. A year later, there are indications that parties may be using the threat of an examiner and its associated costs and complications as a source of leverage. Sidley’s Bill Curtin and Chelsea McManus discuss the impact and implications of the FTX decision on examiner motion practice, and restructuring in general, in the Third Circuit and beyond.
This article was first published by the New York Law Journal on February 5, 2025.
