Insolvency and Restructuring Update


Davis Polk Partner Testifies Before Congress on Airline Bankruptcies

December 21, 2009

Marshall S. Huebner, who co-heads Davis Polk's Insolvency and Restructuring Group and served as lead counsel in several airline restructurings, testified by invitation before Congress on how to restructure the Bankruptcy Code to strike a better balance between debtors' needs for reorganization tools and the needs of and issues facing employees of companies in Chapter 11. Specifically, Mr. Huebner recommended four changes to Section 1113 of the Bankruptcy Code:

  • Considering executive compensation both during the Chapter 11 proceedings and one year prior thereto
  • Limiting debtors’ 1113 proposals to four years following emergence from bankruptcy
  • Allowing damage claims for union members in respect of 1113 contract rejections, which claims will often translate into equity in the reorganized company
  • Ensuring that before deciding on a motion to reject a contract, a court consider both sides’ final proposals in addition to their initial proposals

The hearing was held before the House Judiciary Subcommittee on Commercial and Administrative Law.

 

Click here to read a transcript of Huebner's testimony.

Click here to read the article from BNA's Daily Labor Report.

 

If you have any questions regarding matters covered in this update, please contact any of the lawyers listed below or your regular Davis Polk contact.

Laureen F. Bedell 212 450 4167laureen.bedell@davispolk.com
Donald S. Bernstein 212 450 4092donald.bernstein@davispolk.com
Avi Gesser 212 450 4429avi.gesser@davispolk.com
Timothy Graulich 212 450 4639timothy.graulich@davispolk.com
Marshall S. Huebner 212 450 4099 marshall.huebner@davispolk.com
Benjamin S. Kaminetzky 212 450 4259ben.kaminetzky@davispolk.com
Damian S. Schaible 212 450 4580damian.schaible@davispolk.com
Karen E. Wagner 212 450 4404karen.wagner@davispolk.com
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2009 Davis Polk & Wardwell LLP