SCOTUS Grants Cert In Jevic

Yesterday, the Supreme Court granted certiorari in Czyzewski v. Jevic Holding Corp ("Jevic"). As previously reported, Jevic addressed whether a bankruptcy court can approve a settlement agreement that provides for distributions that violate the absolute priority rules as part of the structured dismissal of a chapter 11 proceeding. The Third Circuit held that such structured dismissals were appropriate even when they provided for distributions that do not strictly comply with the Bankruptcy Code's absolute priority schemes.  The Third Circuit's ruling is consistent with the Second Circuit's holding in In re Iridium Operating LLC,¹ which held that such structured dismissals may be appropriate if they are justified by other factors, but put the Third Circuit in conflict with the Fifth Circuit, which held in Matter of AWECO, Inc. ² that it was inappropriate to approve a structured dismissal that did not strictly comply with the absolute priority rule. The Supreme Court