Judge Vincent Bricetti of the United States District Court for the Southern District of New York issued a ruling in the Momentive Performance Materialscases affirming the Bankruptcy Court’s confirmation rulings on Monday, May 4.  Key themes raised in this case of interest to distressed investors and addressed in Judge Bricetti’s ruling include the appropriate interpretation of

Overview

This article considers the state of the care homes industry, certain issues that arise when dealing with the imminent insolvency of care homes and initial considerations about what to take into account when determining sales strategy.

General concerns

“…to be my student, you must develop a taste for victory.”

 Pai Mei, Kill Bill

Judge Drain’s recent bench rulings in Momentive Performance Materials in 2014 generated a great deal of controversy in the distressed debt world.  Distressed investors, lenders, and commentators have questioned whether the Momentive rulings will lead to an industry trend in which debtors seek to cram down their secured lenders to take advantage of the ability to do so at below market interest rates.  

2014 has been a tumultuous year, filled with tragedy and interstellar triumphs: Ebola; Sochi; Ukraine; Flight 370; ISIS; Flight 17; Comet 67P. Life in the corporate bankruptcy and restructuring world was considerably more sedate than in the world at large. Now five and six years removed, some of the mega cases of the 2008 and 2009 era linger on and continue to generate interesting legal developments. 

“Life is not about perfect information. Life is about choices, which is why you have elections.”

We previously covered the Meridian Sunrise Village case on the Bankruptcy Blog here.

On August 26, 2014, Judge Drain concluded the confirmation hearing in Momentive Performance Materials and issued several bench rulings on cramdown interest rates, the availability of a make-whole premium, third party releases, and the extent of the subordination of senior subordinated noteholders.

On August 26, 2014, Judge Drain, of the Bankruptcy Court for the Southern District of New York, concluded the confirmation hearing in Momentive Performance Materials and issued several bench rulings on cramdown interest rates, the availability of a make-whole premium, third party releases, and the extent of the subordination of senior subordinated noteholders. This four-part Bankruptcy Blog series will examine Judge Drain’s rulings in detail, with Part I of this series providing you with a primer on cramdown in the secured creditor context.

This case considered whether Bulmers Transport Limited (“Bulmers”) was under the “supervision of an insolvency practitioner” pursuant to Regulation 8(7) Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).

Comment

The case provides some helpful clarity on the inter-relationship of Regulation 8(7) TUPE and s388 Insolvency Act 1986, when determining whether a company is under the “supervision of an insolvency practitioner”.