Ruling overturns New York decision rejecting market-based approach.
Key Points:
• Court of Appeals for the Second Circuit requires courts to consider efficient market interest rate, if available, for purposes of chapter 11 “cramdown.”
• Second Circuit decision overturns lower court ruling that used “formula approach” to determine appropriate chapter 11 cramdown interest rate.
Second Circuit’s reversal of controversial restructuring decision may boost confidence among distressed bond issuers.
Bankruptcy Court reinforces importance of parties’ intent in determining the nature of overriding royalty interests under state law.
To successfully reorganize in Chapter 11, a bankrupt company may need to retain key employees who understand the company’s business and who can design and implement the company’s reorganization plan. Retaining and properly incentivizing these employees during a Chapter 11 case can be challenging for a number of reasons.
On April 1, 2012 Drydocks World LLC (DDW) and its subsidiary Drydocks World — Dubai LLC (DDW Dubai), a Dubai- and Asia-based ship building and repair company that is wholly owned by Dubai World, became the first company to commence a reorganization proceeding in the Special Tribunal1 (the Tribunal) created by Dubai Decree No. 57 for 2009 (Decree 57) and avail itself of Decree 57’s integrated legal framework.
Recently, several courts have added to the growing body of decisions construing intercreditor agreements in bankruptcy cases.
3V Capital Master Fund LTD. v. Official Comm. of Unsecured Creditors of TOUSA, Inc. (In re TOUSA, Inc.), 2011 U.S. Dist. LEXIS 14019 (S.D. Fla. Feb. 11, 2011).