On May 30, 2023, in a highly anticipated ruling, the United States Court of Appeals for the Second Circuit held that bankruptcy courts have the authority to approve plans with non-consensual releases of direct third-party claims against a non-debtor.

Serta Simmons Bedding, LLC’s (“Serta”) chapter 11 reorganization plan has been confirmed by the U.S. Bankruptcy Court for the Southern District of Texas in its June 6, 2023 decision. The presiding judge, Judge David R. Jones, confirmed the Serta debtors’ chapter 11 plan and ruled that the 2020 uptier exchange transaction (detailed further below) (the “Priming Transaction”) was “not prohibited” by Serta’s 2016 credit agreement (the “Agreement”) and is “binding and enforceable in all respects.” Importantly, the court separately ruled that Serta and certain participating lenders to the Priming Transaction did not violate the implied covenant of good faith and fair dealing.

Shearman & Sterling Finance Partner Bjorn Bjerke discusses the benefits and features of securitization and other structured financing arrangements in the second chapter of the 2023 International Comparative Legal Guide on Securitization, the ICLG’s 16th edition of the highly-regarded manual.

In our insight “Personal Liability of Directors for Climate Strategy: Landmark Case against Energy Company Board,” we analyzed the claim filed in the English High Court by non-profit organization ClientEarth against the directors of Shell. The claim was one of the first known attempts to bring a derivative action—an action brought by a shareholder of a company in the shareholder’s own name, but on behalf of the company—seeking to hold directors personally liable for alleged harm to the company arising from purported mismanagement of climate risk.

Real Estate partner Kris Ferranti and Tax partner Derek Kershaw examine the advantages and potential risks for commercial leases that fall under Section 467 of the Internal Revenue Code in an article published in the Real Property section of the American Bar Association’s Spring 2023 eReport.

Shearman & Sterling’s Capital Markets and M&A partners have once again co-authored chapters in Global Legal Insights latest edition of ‘Initial Public Offerings’ focusing on the UK, USA, France and Italy.

On May 19, 2023, the U.S., in coordination with the G7 and other international partners, released a new tranche of sanctions and other restrictive economic measures to further target Russia’s capacity to continue its aggression against Ukraine. In a multi-agency effort, the U.S. designated over 300 new sanctions targets, added 71 entities to BIS’s Entity List and introduced new restrictions on companies and individuals doing business with Russia’s architecture and engineering sectors and on the export of certain goods to Russia, Belarus or Ukraine.

On May 3, 2023, the Tax Court released a memorandum opinion in ES NPA Holding LLC v. Commissioner holding that the taxpayer’s indirect receipt of a profits interest in a lower-tier partnership qualified as a non-taxable event under the safe harbor provided in Rev. Proc. 93-27. The opinion provides a well-reasoned application of the profits interest safe harbor that puts to rest certain unsettled tax issues relating to the use of such structures.

On May 3, 2023, the SEC adopted new disclosure requirements for stock buybacks, including disclosure of daily share repurchase activity on a quarterly basis. These quarterly reports of daily share repurchase activity will be mandatory, not just for U.S. domestic companies, but also for foreign private issuers (FPIs) other than MJDS filers.

On May 12, 2023, the Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) released Notice 2023-38 (the “Notice”) to provide guidance on the domestic content requirements under IRC sections 45, 45Y, 48 and 48E.