Jevic – A Paradigm Shift for General Unsecured Creditors? Only Time Will Tell

In its March 2017 decision in Czyzewski v. Jevic Holding Corp., the Supreme Court of the United States (the "Supreme Court") held that case-ending structured dismissals which circumvent the absolute priority rule and do not have a significant Bankruptcy Code related justification are impermissible. Because creditors' committees rely heavily on structured dismissals and related gifting provisions to obtain a recovery for holders of general unsecured claims ("GUCs") where a recovery would not otherwise be possible, practitioners and commentators have expressed concern over the long term implications of the Jevic decision.