On January 15, 2016, the Third Circuit Court of Appeals issued a precedential opinion (the “Opinion”) affirming the October 20, 2014 opinion of Judge Gross. The Opinion is available here. My blog post about Judge Gross’ opinion is available here: Trump Entertainment – A Debtor’s Rejection of a Bargaining Agreement. Note, this was a direct appeal from the Bankruptcy Court to the Third Circuit.
The Third Circuit, in affirming Judge Gross’ opinion, uses nearly identical reasoning. It finds “the intent of Congress here also to be clear but that intent was to incorporate expired CBAs in the language of [Section] 1113.” Opinion at *26. “To hold that a debtor may reject an expired CBA or its continuing obligations as defined by the expired CBA is also consistent with the purpose of the Bankruptcy Code, which gives debtors latitude to restructure their affairs.” Opinion at *27.
The Appellate Court concludes by stating that “[I]n light of Chapter 11’s overarching purposes and the exigencies that the Debtors faced, we conclude that the Bankruptcy Court did not err in granting the Debtors’ motion.” Opinion at *30.