"ABS" is a natural fit for midstream oil and gas assets because the assets generate predictable, contracted cashflows — exactly what securitization markets reward. Here’s how a securitization transaction typically works:The Core StructureA midstream company (the originator/sponsor) isolates a pool of revenue-generating assets into a Special PurposeVehicle (SPV) — a bankruptcy-remote entity that issues securities to capital markets investors.
In M&A transactions, the focus is often on getting to the finish line—negotiating terms, securing financing, and closing the deal. But experienced dealmakers know that signing on the dotted line is just the beginning. The true test of a transaction lies in what happens after the champagne corks have popped: Can the combined entity sustain operations? Will vendors and customers remain confident? Is there sufficient liquidity to weather integration challenges?
The Southern District of Texas Bankruptcy Court recently underscored the importance of carefully implementing Chapter 15 eligibility. In its Geden and Siu-Fung decisions, the court reasserted its independent duty to scrutinize foreign recognition requests, providing constructive guidance on the steps foreign representatives should take to strengthen their Chapter 15 filings. The rulings offer practical lessons for ensuring compliance with U.S. bankruptcy law requirements and navigating potential recognition challenges.
Key Takeaways
Jackson Hospital has sued Blue Cross and Blue Shield of Alabama in an Alabama bankruptcy court for $250 million. The Montgomery-area hospital claims that years of claims underpayment by the insurance giant have directly contributed to its insolvency.
Executive Summary
Under § 547(b) of the Bankruptcy Code (emphasis added):
- “the trustee may, based on reasonable due diligence in the circumstances of the case and taking into account a party’s known or reasonably knowable affirmative defenses under subsection (c), avoid [a preferential transfer.”
Question: What amount of detail is required in a preference complaint to satisfy the above-quoted “reasonable due diligence” requirement?