USA – NEW JERSEY Trends and Developments Contributed by: Brett S. Theisen, John S. Mairo, Robert K. Malone and David N. Crapo, Gibbons P.C.
Supreme Court’s ruling in Purdue and, therefore, that the public policy exception to the rule of comity pre - cluded recognition of Crédito Real’s plan under Chap - ter 15. Overruling the creditor’s opposition, Bankrupt - cy Judge Horan concluded that Purdue is limited to cases under Chapter 11 of the Bankruptcy Code and, for that reason, does not preclude the recognition of a restructuring plan containing non-consensual releases pursuant to Chapter 15. Finding that “comity is key”, Judge Horan found that Crédito Real’s plan did not implicate the public policy exception asserted by the creditor. The Vertiv and Crédito Real decisions underscore Chapter 15’s efficacy and speed, particularly in the District of New Jersey, to enforce foreign insolvency rulings. Practitioners should note the following. • Comity alone may suffice in some instances, but Chapter 15 accelerates enforcement and provides a clearer legislative basis for doing so. • The Third Circuit insists on proper comity stand - ards even where Chapter 15 is not invoked – but then Chapter 15 can fill the gap. • In cross-border disputes involving New Jersey debtors or assets, Chapter 15 should be consid - ered a first-line strategy, particularly when other factors are present, such as a need to obtain third- party releases that may be permissible in the sister jurisdiction, but not in the USA after Purdue . Direct versus derivative claims: Whittaker Daniels (Third Circuit, 2025) Background and legal issue In In re Whittaker, Clark & Daniels Inc. , No 24-2210 (3d Cir. 10 Sept. 2025), the Third Circuit affirmed the bank - ruptcy court’s grant of summary judgment to the debt - ors, holding that successor liability claims against non- debtor Brenntag North America, Inc., under a “product line” theory, constitute general claims belonging to the debtors’ estates under Section 541 (a)(1) of the Bankruptcy Code, rather than direct, personal claims available to individual tort creditors. The Official Com - mittee of Tort Claimants (the “Committee”) argued that these claims were personal to the mesothelioma vic - tims, as they arose from unique harms inflicted by the debtors’ asbestos-contaminated talc products. The Third Circuit, however, focused on the theory of liabil -
ity, applying its established framework to distinguish between derivative (general) claims, which augment the estate for pro rata distribution, and direct (per - sonal) claims, which stem from individualised injuries traceable to a non-debtor defendant’s independent conduct. Legal framework for direct versus derivative claims Drawing on In re Emoral , 740 F.3d 875 (3d Cir. 2014) and In re Wilton Armetale, Inc. , 968 F.3d 273 (3d Cir. 2020), the panel reiterated that a claim qualifies as estate property if it (i) existed at the petition date and (ii) is general in nature, meaning it lacks a particular - ised injury and is based on facts available to any credi - tor. Critically, the Third Circuit’s analysis turns not on the injury’s character but on the liability theory: general claims derive from the debtor’s relationship with the third party and would benefit all creditors by expand - ing the estate, whereas personal claims involve direct interactions between the claimant and the third party. The Third Circuit rejected any additional requirement that the debtor hold an independent state-law right to assert the claim, clarifying that Bd of Trs of Teamsters Loc. 863 Pension Fund v Foodtown, Inc. , 296 F.3d 164 (3d Cir. 2002) does not impose such a prong but merely notes it as sufficient under Section 541. Application to successor liability claims Applying this test, the Third Circuit determined that the Committee’s product-line claims against Brenntag – predicated on Brenntag’s acquisition of the debt - ors’ manufacturing assets and continuation of talc operations – depended solely on Brenntag’s succes - sor relationship to the debtors, and not on any direct harm arising from Brenntag’s independent actions towards claimants. Thus, these claims were general and derivative of the estate, akin to those in Emoral , where successor liability against a non-debtor affiliate was deemed estate property. The court dismissed the Committee’s contention that the claims’ focus on tort victims rendered them personal, emphasising that the relevant inquiry is the commonality of the liability facts, not the creditor class affected. Accordingly, only the debtors may pursue or settle these claims, underscor - ing the primacy of the Emoral framework in mass tort bankruptcies involving successor theories.
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