The United States Court of Appeals for the Fifth Circuit affirmed a key ruling in the Chapter 11 restructuring of Corelle Brands (formerly Instant Brands), holding that following its reorganization, the company properly retained indemnification rights tied to previously completed purchase orders.
The decision rejects objections by Midea entities and confirms that the individual purchase orders under the master supply agreement constituted separate, divisible contracts. As a result, Corelle Brands was entitled to retain indemnification rights associated with those completed transactions, even after assigning the supply agreement as part of its restructuring.
The ruling affirms both the bankruptcy court and district court and provides important guidance on contract divisibility and the treatment of indemnification rights in Chapter 11 cases.
The Haynes Boone team was led by Restructuring Partner Charles A. Beckham Jr. and Appellate Partner Natasha Breaux, with support from Restructuring Counsel Kourtney Lyda and Restructuring Associate David Trausch.
“This decision reinforces that courts will look closely at the structure of commercial relationships when determining whether contracts are divisible,” Beckham said.
Breaux added, “It provides meaningful clarity for companies navigating how rights and liabilities are allocated in complex restructurings, particularly in transactions involving supply agreements.”
The confirmed plan became effective in February 2024 and included the strategic sale of the company’s appliance business.
Haynes Boone’s Restructuring Practice Group delivers solutions in high-stakes bankruptcies and distressed situations. The firm’s nationally recognized group handles complex out-of-court restructurings and Chapter 11 cases across industries including energy, technology, retail, healthcare and manufacturing. Haynes Boone's Appellate Practice Group is nationally recognized for winning precedent-setting appeals and shaping litigation strategy at every stage of trial.
