A Bankruptcy Court’s Authority to Find an Implicit Waiver of a Debtor’s Rights Under a Chapter 11 Reorganization Plan
In chapter 11 cases, bankruptcy courts often deal with parties seeking reorganization or the approval of a reorganization plan. However, repeated instances of post-confirmation disputes have led courts to address the issue of whether bankruptcy courts retain jurisdiction in disputes that arise after the plan has been confirmed. It is settled that bankruptcy courts retain post-confirmation jurisdiction regarding certain matters in chapter 11 cases. Since reorganization plans are treated like contracts between parties, issues of contract law regularly arise in bankruptcy court in post-confirmation cases. One such issue is whether a bankruptcy court may authorize an implicit waiver of a debtor’s rights under a confirmed chapter 11 reorganization plan.
This memorandum discusses how a bankruptcy court faced with such an issue may authorize a finding that a debtor implicitly waived a right provided under its chapter 11 plan of reorganization. Part I analyzes the threshold questions that a court must ask before retaining post-confirmation jurisdiction. Part II compares a plan of reorganization to a general contract and analyzes the requirements for an implied waiver. The memorandum concludes that an implied waiver, in the context of a reorganization plan, serves as a benefit for parties involved in reorganization, and for the efficiency of bankruptcy proceedings overall.