On January 29th, PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electricity Company (collectively, “PG&E”), commenced bankruptcy cases in the Bankruptcy Court for the Northern District of California. Here are nine things to watch for in the PG&E bankruptcy.

1. REPLACE THE BOARD? In the wake of PG&E’s announcement to file bankruptcy, certain equity holders are pushing to replace the board of directors at the upcoming annual shareholder meeting.

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On January 29th, PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electricity Company (collectively, “PG&E”), commenced bankruptcy cases in the Bankruptcy Court for the Northern District of California. Here are nine things to watch for in the PG&E bankruptcy.

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On May 25, 2018, the United States Court of Appeals for the Second Circuit (the “Court”) affirmed a district court’s affirmance of a bankruptcy court’s decision in In re Sabine Oil & Gas Corp. that permitted a debtor to reject a midstream gathering agreement as an “executory contract.”1 The Court’s decision, which is the first Court of Appeals to address the rejection of a midstream gathering agreement, firmly establishes a debtor’s right to do so under certain circumstances.

BACKGROUND

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The ATP Oil & Gas Corporation bankruptcy case (Case No. 4:12-bk-36187, S.D. Texas) (“ATP”) involved the intersection of energy and bankruptcy law on a variety of issues. Most recently, the Fifth Circuit Court of Appeals rendered a decision arising from that case dealing with the relative rights or priorities between the holder of overriding royalty interests (“ORRI”) and parties asserting lien claims or privileges under the Louisiana Oil Well Lien Act (“LOWLA”) (La. Rev. Stat § 9:4861) in a case titled OHA Investment Corporation f/k/a NGP Capital Resources Company v.

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On February 11, 2011, in a decision that represents a significant victory for institutional lenders and other proponents of capital market financing, Judge Alan S. Gold of the United States District Court for the Southern District of Florida (the District Court) issued a 113 page opinion overturning a $480 million fraudulent transfer judgment entered by the United States Bankruptcy Court for the Southern District of Florida (the Bankruptcy Court) against the so-called “Transeastern Lenders” in the TOUSA, Inc. (TOUSA) chapter 11 bankruptcy cases.i

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Background: Grupo OAS, a Brazilian construction conglomerate linked to a massive corruption scandal (“OAS”), filed for Chapter 15 creditor protection in the Bankruptcy Court for the Southern District of New York on April 15, 2015, two weeks after entering bankruptcy in Brazil. If “recognized” by Bankruptcy Judge Stuart Bernstein, the Chapter 15 petition would, among other things, essentially bind OAS creditors in the United States to the restructuring terms approved by the Brazilian court overseeing OAS’s reorganization.

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On March 12, 2015, the United States Court of Appeals for the Eleventh Circuit affirmed the authority of a bankruptcy court to issue non-consensual, non-debtor releases in connection with the confirmation of a plan of reorganization.1   With this decision, the Eleventh Circuit joined the majority view that such releases are permissible under certain circumstances.

Background

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