Mass Tort Bankruptcies Face a New Challenge: Citing Due Process Problems, 2d Circuit Overturns “Free and Clear” Asset Sale Terms for GM Bankruptcy

In a major ruling issued yesterday, the 2d Circuit overturned portion of the the “free and clear” asset sale order entered for GM by Judge Gerber. The cite is Elliott v. GM LLC (In re Motors Liquidation Co.), 829 F.3d 135 (2d Cir. 2016). The opinion is important for multiple reasons, including its ruling and rationale as to providing great protections for companies if they make full disclosure of product defects in the bankruptcy. The court held the contingent claimants were denied due process notice...