Hornblower Wins Dismissal of Creditor Appeal of Bankruptcy Confirmation Plan as Equitably Moot

Paul, Weiss secured a significant victory for Hornblower Holdings LLC and its reorganized debtor affiliates when the U.S. District Court for the Southern District of Texas granted Hornblower’s motion to dismiss Argonaut Insurance Company’s appeal of the bankruptcy court’s ruling confirming Hornblower’s plan of reorganization as equitably moot.

Argonaut's appeal challenged the chapter 11 plan’s treatment of unsecured subrogation claims, arguing that they should be entitled to priority in the bankruptcy. Paul, Weiss moved to dismiss the appeal, successfully arguing that granting the relief Argonaut sought would impermissibly unwind the plan, harm third parties that relied on the confirmation orders, and jeopardize the success of the reorganization—precisely the circumstances warranting equitable mootness.

The decision preserves the finality of Hornblower’s fully implemented chapter 11 plan and ensures Hornblower can continue to execute its go-forward business plan without the disruption and value destruction that would have resulted from reallocating plan consideration post emergence.

The Paul, Weiss team includes litigation partners Andrew Ehrlich and Greg Laufer, who argued the motion; restructuring partners Paul Basta, Jake Adlerstein and Kyle Kimpler, and counsel Sarah Harnett; and litigation counsel Robert Kravitz.