ABFJ Final Cut MayJune 2017

In a decision ruling on Czyzewski v. Jevic Holding, the U.S. Supreme Court confirmed that the Bankruptcy Code does not permit “priority skipping” in Chapter 11 structured dismissals. In doing so, the court held that, although the code does not explicitly provide which priority rules apply to the distribution of estate assets in a Chapter 11 structured dismissal, “[a] distribution scheme in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the code.”