amendments as required under Section 5.6 of the agreement. Section 1142(b) of the
Bankruptcy Code provides, in relevant part, that "the court may direct any necessary
party to ... perform any act ... that is necessary for the consummation of the plan."
The court found that, as a matter of custom and under the contract, Relativity and its
lender are entitled to new assignment notices that would incorporate reasonable new
outside dates.
However, the court reasoned that Section 1142(b) does not go so far
as to authorize the court to impose upon Netflix the new outside dates proposed by
Relativity. Instead, the court strongly signaled to Relativity that it may seek—in
another judicial forum—to compel Netflix's execution of amended assignment notices
with new outside dates. It is easy to assume that Relativity will take the court's
advice in this regard.
The court likewise denied Netflix's Stern claim because there was no stare decisis
preventing the bankruptcy court from enforcing its own prior plan confirmation order or
making a final ruling as to res judicata and judicial estoppel matters in the context of
the confirmation process.
The Relativity decision highlights the need in a bankruptcy proceeding to be mindful of
the potential impact an asserted position at one hearing may have later in the case,
even if it involves different circumstances.
Among other examples of this conundrum
include whether a secured creditor takes the position at the outset of the case as to
whether or not it is fully secured. In this case, Netflix has already filed its notice of
appeal with the U.S. District Court for the Southern District of New York.
It will be
interesting to see how things play out on appeal.
The material in this publication was created as of the date set forth above and is
based on laws, court decisions, administrative rulings and congressional materials
that existed at that time, and should not be construed as legal advice or legal opinions
on specific facts. The information in this publication is not intended to create, and the
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