The COVID-19 pandemic created unprecedented disruptions across the global economy, perhaps most severely in the retail sector. Shelter-in-place orders, government-mandated closures and other restrictions drastically reduced or entirely wiped out revenue streams, resulting in an increased number of bankruptcy filings by retail debtors.

The Fed and the FDIC, in an August 30 joint press release, announced that they are extending the filing deadline for Prudential Financial Inc. and four major foreign banking organizations to submit their resolution plans. Prudential Financial, a designated nonbank SIFI pursuant to Dodd-Frank, will now have until December 31, 2019, to submit its living will, a year later than previously required (and following previous extensions).

How much stress can we expect to see for oil and gas producers and related companies as a result of the current low prices? And what special issues does this industry face when it’s time to restructure or file for bankruptcy?*

Declining oil prices

Volatile commodity prices in 2020 led to the bankruptcy of many oil and gas producers. While some analysts expect oil and gas prices to rise during 2021, the US Energy Information Administration’s 2021 annual outlook advises that a return to 2019 levels of US energy consumption will take years.[2]

Twenty years after Noble Energy, Inc. acquired assets from the bankruptcy estate of Alma Energy Corp., ConocoPhillips, Co. asserted a US$63 million claim against Noble regarding the acquisition.

In Quadrant Structured Products Co. v. Vertin, 2015 WL 2062115 (Del. Ch. May 4, 2015), the Delaware Court of Chancery (Vice Chancellor J. Travis Laster) announced a bright-line standard governing the threshold inquiry of when a creditor can maintain a derivative suit against directors for breach of fiduciary duty. The court held that a creditor need only establish that the company was balance sheet insolvent at the time the suit was filed and that the creditor’s standing will not be extinguished if the company rides back into solvency during the litigation.

On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act of 2021 (CAA), the omnibus funding bill that makes consolidated appropriations for the fiscal year ending September 30, 2021. The CAA also provides various forms of economic relief to address the effects of the COVID-19 pandemic.

As part of its coronavirus response, the CAA includes a number of amendments to the Bankruptcy Code. The key amendments are addressed below.

Temporary statutory protection of certain arrearage repayments under forbearance arrangements

The economic value of IP rights in US bankruptcy proceedings has risen rapidly. Due to Congress's unique view of trademark licenses, appellate courts are increasingly divided on the ability both of debtor-owners to freely reject them, and of licensees to continue to use them. In In re Tempnology LLC,1 the Supreme Court has been asked to provide much-needed certainty on these issues.

In recent months, the US has seen a staggering increase in the number of retailers, both large and small, filing for bankruptcy. Among others, Dots, Alco Stores, Radio Shack, Deb Shops, Wet Seal, and Delia’s have each filed for bankruptcy protection in the past six months alone.

Introduction