Stark Upholds Granting of Nunc Pro Tunc Retentions by Bankruptcy Court

Mark Felger and Barry Klayman co-authored an article in the Delaware Business Court Insider that discusses a recent decision by U.S. District Court Judge Leonard P. Stark in City of Rockford v. Mallinckrodt (In re Mallinckrodt), 2022 WL 906451 (D. Del. Mar. 28, 2022). The case upholds the granting of retroactive retentions of ordinary course professionals by the Bankruptcy Court in the face of a challenge based on a Supreme Court case that some commentators thought rang the death knell for nunc pro tunc orders.

In 2020, the Supreme Court ruled that “the federal courts may issue nunc pro tunc orders, or ‘now for then’ orders, to reflect the reality of what had already occurred.” Roman Catholic Archdiocese of San Juan, Puerto Rico v. Acevedo Feliciano, 140 S. Ct. 696 (2020).

Mallinckrodt involved an appeal from an order of the Bankruptcy Court approving the debtors’ decision to retain a law firm as special counsel under 11 U.S.C. Section 327(e) nunc pro tunc to the petition date. The appellants challenged the sufficiency of the law firm’s disclosures as well as the nunc pro tunc nature of the relief, citing Acevedo,” Mark and Barry explained.

In this article, Mark and Barry explain why the District Court concluded that the Acevedo decision did not support the appellants’ arguments and the Bankruptcy Court did not abuse that discretion. They also highlight that the District Court’s decision “put to rest concerns that the Acevedo opinion foreclosed the granting of nunc pro tunc relief where otherwise warranted and appropriate.”

To read the full article, click here.

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Mark E. Felger

Co-Chair, Bankruptcy, Insolvency & Restructuring

(302) 295-2087

Barry M. Klayman

Of Counsel

(302) 295-2035

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