As reported by Law360, U.S. Bankruptcy Judge Frank Santoro has entered an order “re-confirming” the Chapter 11 plan of Ascena Retail Group (n/k/a Retail Group, Inc.), the former owner of the Ann Taylor clothing brand. On appeal, the District Court ruled (among other things) that the sweeping third party release in the plan be stricken in its entirety, as requested by the securities claimants represented by Lowenstein Sandler as well as the United States Trustee. The judge congratulated the parties for their "smooth transition" to the new plan.
As initially confirmed in February 2021, Ascena’s Chapter 11 plan contained an extremely broad third party release of claims against numerous parties that had no involvement in the Chapter 11 case – including two former executives of the company who are the defendants in a securities litigation pending in the District of New Jersey. The securities claimants represented by Lowenstein, together with the United States Trustee, appealed.
On appeal, the District Court deemed the third party release void in its entirety. Lowenstein Sandler’s advocacy on behalf of the securities claimants was instrumental to the parties’ success on appeal.
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