Both the First Energy Solutions and PG&E bankruptcies have seen proceedings regarding power purchase and similar agreements (PPAs) that raise this question.
Background
Contracts often contain provisions that enable a party to terminate or modify the contract based on the other party's bankruptcy filing, insolvency or deteriorating financial condition. In general, the Bankruptcy Code renders these types of provisions (sometimes referred to as "ipso facto" clauses) ineffective. Specifically, under section 365(e)(1) of the Bankruptcy Code (emphasis added):
After months of speculation, it is now official : PG&E (both the parent, PG&E Corporation, and its subsidiary, Pacific Gas & Electric Company), having faced extraordinary challenges relating to catastrophic wildfires in 2017 and 2018, has announced that a voluntary bankruptcy filing “is appropriate, necessary and in the best interests of all stakeholders, including wildfire claimants, PG&E’s other creditors and shareholders, and is ultimately the only viable option to restore PG&E’s financial stability to fund ongoing operations and provide safe service to customers.” As
Merit Management Group, LP v. FTI Consulting, Inc., No. 16-784 (2018)
The director at the heart of the Carrington Wire pension fund deficit saga has been disqualified for a period of 12 years.
Background
The English High Court has, in one of the few successful cases on wrongful trading, clarified when directors ought to know that there is no reasonable prospect of avoiding insolvent liquidation and where the burden of proof lies in such cases.
Background
The English High Court has again considered whether by itself the choice of English law and court jurisdiction in legal documentation establishes a “sufficient connection” with England to enable a foreign company to avail itself of an English scheme of arrangement.
Background
Over the last seven months there has been a spate of cases dealing with the relationship between arbitration law and insolvency law.
Winding-up petitions and arbitration clauses
On 26 May 2015 new UK insolvency law changes take effect and all insolvency practitioners and stakeholders should be aware of these amended rules which apply from today onwards. Read on to make sure you are up to date!
The UK Government announced plans in parliament on 3 March 2015 requiring insolvency practitioners to provide an upfront estimate of their fees for creditor approval, where they are charging on a time-cost basis. The new rules are expected to be in force from October 2015 for English and Welsh regimes (although they will not apply to members’ voluntary liquidations).
Health Warning: This Blog may not be historically accurate
If, like me, you have recently attended one of the many St Patrick’s Day parades that have taken place across the UK and worldwide, you are no doubt acutely aware that St Patrick was a polyester clad leprechaun with a penchant for drinking Guinness and turning rivers green. However, it may come as a shock to learn that St Patrick was also a dyed-in-the-wool insolvency litigator.