Morgan Lewis on Restructuring, Winter 2006

In this Issue:

• Non-Debtor Releases in Reorganization Plans- Are they still viable or a thing of the past in the Second Circuit?:
  Plans of reorganization have increasingly included provisions releasing and permanently enjoining claims against not only the debtor, who is generally entitled to a discharge of all pre-confirmation debts, but also third parties. Non-debtor release provisions may be critical to ensuring the reorganized debtor's fresh start, where it would otherwise be faced with post-confirmation indemnification claims by officers and directors, lenders, insurance carriers and others.
• Post-Confirmation Jurisdiction- Just Say No?:
  Following confirmation, reorganized debtors are expected to carry out the terms of their plan of reorganization and resume the task of competing in a world outside the protections of bankruptcy. However, reorganized debtors often return to the familiar surroundings of the bankruptcy court long after their plans have been confirmed.
• The Enforceability of X Clauses in Bankruptcy:
  The X clause is generally enforceable; careful drafting can minimize litigation.

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