test folder

181 • Whether the plan provides for payment in full, or substantially in full, of the impaired class; • Whether the plan provides an opportunity for opt-out creditors to be paid in full; and • Whether the bankruptcy court made a record of specific factual findings that support its conclusions. 101 Any party opposing the release of a nondebtor should object to such release in the bankruptcy court before such release becomes final and immune from attack. 102 One exception to the high hurdles associated with third party releases is the exculpation of persons involved in the debtor's restructuring efforts provided that such persons remain liable for gross negligence and willful misconduct. 103 4. Exemption from Securities Laws The Bankruptcy Code provides a limited exemption from the registration requirements of Federal and State securities law for securities issued under a plan by a debtor, an affiliate participating in a joint plan with the debtor or a successor to the debtor in exchange for a claim against or an interest in the debtor or such affiliate as well as for certain other securities. 11 U.S.C. § 1145(a). This exemption, however, is not available for any entity that is an underwriter, which, for purposes of the Bankruptcy Code, means any entity that (i) purchases a claim against, or an interest in, the debtor for the purpose of distributing any security received in exchange for such claim or interest, (ii) offers to sell 101 In re Dow Corning Corp., 280 F.3d at 658. 102 See Travelers Indem. Co. v. Bailey, 129 S. Ct. 2195 (2009) (injunction barring suits against nondebtor insurers issued as part of Chapter 11 plan could not be challenged – even if the releases at issue were beyond the bankruptcy court's jurisdiction to grant – because the confirmation order was final on direct review). 103 See In re PWS Holding Corp., 228 F.3d 224 (3d Cir. 2000) (where court upheld a similar provision in a plan on the basis that it merely states the standard of liability rather than affects a release).

• Cover