In Re: Gol Linhas Aereas Inteligentes S.A.
1:25-cv-04610
S.D.N.Y.Jun 5, 2025Background
- GOL Linhas Aéreas Inteligentes S.A. ("GOL") and its affiliates filed for Chapter 11 bankruptcy in the Southern District of New York, reporting significant assets and liabilities.
- As part of the reorganization, the GOL debtors proposed a Plan containing non-debtor (third-party) release provisions, which would bind creditors who did not explicitly opt out.
- The United States Trustee (UST) objected to the third-party release mechanism, arguing that the opt-out process did not amount to valid consent under applicable law.
- The Bankruptcy Court overruled the objection, confirmed the Plan, and explained its reasoning in a detailed opinion; the UST appealed and sought a stay of the Plan's third-party releases pending the appeal.
- Multiple parties, including GOL and creditor committees, agreed to waive arguments that the appeal would be equitably moot even after plan consummation.
- The District Court denied the UST's motion for a stay pending appeal, emphasizing lack of irreparable harm and the significant disruption a stay would cause to the reorganization.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Legality of non-consensual third-party releases | UST: Silence or failure to opt out is not consent; releases invalid without explicit consent under state law | GOL: Federal law applies; opt-out constitutes implied consent; releases are essential and valid | Court: Serious legal question, but no likelihood of success shown for stay |
| Irreparable harm from lack of stay | UST: Stay is needed to preserve appellate rights; risk of equitable mootness | GOL: Waiver of equitable mootness; no real threat to appellate rights | Court: No irreparable harm; appeal rights preserved and waivers effective |
| Balance of hardships/equities | UST: Seeks only to preserve review, not to delay emergence | GOL: Delay would be costly and hinder reorganization; harm to creditors increases daily | Court: Hardships favor denial of stay due to financial and operational impact on GOL and creditors |
| Public interest | UST: Justice in legality of releases; right to review | GOL: Finality, expediency, and creditor recovery best served by denying delay | Court: Public interest lies in prompt resolution and execution of bankruptcy plan |
Key Cases Cited
- DiMartile v. Hochul, 80 F.4th 443 (2d Cir. 2023) (Sets out standard for granting a stay pending appeal)
- Roell v. Withrow, 538 U.S. 580 (2003) (Addresses the validity of implied consent in federal proceedings)
- In re Charter Commc'ns, Inc., 691 F.3d 476 (2d Cir. 2012) (Defines and explains the doctrine of equitable mootness)