Temple Law professor Jonathan Lipson’s work has been cited by Supreme Court Justice Stephen Breyer in Czyzewski v. Jevic Holding Corp., a closely-followed bankruptcy case addressing a significant point of bankruptcy law. Professor Lipson was also the coauthor of a Brief for Amici Curiae Law Professors in Support of Petitioners in the case.
In delivering the opinion of the Court, Justice Breyer relied on Professor Lipson’s 2013 article, Stern, Seriously: The Article I Judicial Power, Fraudulent Transfers, and Leveraged Buyouts, 2013 Wis. L. Rev. 1161 (with Jennifer L. Vendermeuse) to explicate the relationship among the parties in the case.
Czyzewski v. Jevic Holding Corp.
At issue in Jevic was whether a bankruptcy court could approve a structured dismissal that departed from the rules governing distributions to creditors without the consent of affected parties. Jevic Holding Corporation had been the subject of an unsuccessful leveraged buyout, in the aftermath of which it filed for bankruptcy. As Professors Lipson and Jacoby explain on Harvard’s Bankruptcy Roundtable, the Petitioners were “truck drivers whom Jevic terminated shortly before it filed for bankruptcy. Holding about $8.3 million in priority wage claims, these workers objected to a settlement that Jevic’s shareholders and senior lenders reached with the creditors’ committee. The settlement denied the workers their priority payment, dismissed the bankruptcy, and foreclosed the workers’ rights to challenge under state law the leveraged buyout that led to the bankruptcy. The Third Circuit concluded that such a settlement was permissible in “rare” circumstances. The Supreme Court disagreed, holding that structured dismissals must comply with priority rules absent consent of the affected parties.”
Professor Jonathan Lipson holds the Harold E. Kohn Chair of Law. A noted expert in commercial bankruptcy, Lipson is a member of the American Law Institute and the American College of Commercial Finance Lawyers, and is active with the Business Law Section of the American Bar Association, where he is currently the Section Content Officer. He has previously been a member of the Business Law Section Council, head of its Publications Board, and co-chair of the Business Law Education Committee. He has written extensively on the question of business failure: how does–and should–the legal system respond when firms can’t (or don’t) pay their bills?