The commencement of a chapter 11 case will call into play the interaction between the policies and goals of the U.S. Bankruptcy Code and other federal and state statutory schemes that may occasionally conflict with these goals. As an example, in the Trump Entertainment Resorts chapter 11 case, the U.S. Court of Appeals for the Third Circuit, in a case of first impression among the circuit courts of appeal, held that a chapter 11 debtor-employer could reject under the Bankruptcy Code the continuing terms and conditions of a collective bargaining agreement after the agreement expired.1
The Third Circuit’s decision allowed for the rejection of the collective bargaining agreement even through such rejection may have been at odds with provisions of the National Labor Relations Act (NLRA). Given this decision is one of first impression at the circuit court level, it most certainly will impact bankruptcy courts in other jurisdictions confronted with this issue or other issues involving the interaction between the Bankruptcy Code and the NLRA or other labor statutes.
Sections 365 and 1113
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