Much has been written in the past several years regarding the scope of a bankruptcy court’s jurisdiction in the wake of the Supreme Court’s decisions in Stern v. Marshall, 564 U.S. ___ (2011) and Executive Benefits Ins. Agency v. Arkison, 573 U.S. ___ (2014). Now, the Supreme Court has weighed in again in the case of Wellness Int’l Network, Ltd., et al v. Sharif, 575 U.S. ___ (2015) in an attempt to clarify the confusion created by Stern.

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

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

 Pai Mei, Kill Bill

A recent Delaware District Court decision concerning an appeal of a bankruptcy settlement clearly provides support for the use of tender offers or other exchange, or settlement mechanics permitted under applicable federal securities laws prior to and outside a plan of reorganization. In essence, this decision permits debtors to utilize exchange offers to repurchase outstanding securities at a discount, or obtain more favorable terms during a bankruptcy proceeding and prior to confirmation of a plan of reorganization.

Case Summary

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.  

The Third Circuit Rules in Favor of the Bankruptcy Estate Creating a Further Circuit Split

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. 

Questions Standing of Indenture Trustees to Pursue Fraudulent Conveyance Claims

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

Case Summary

This case presents a common scenario and dynamic that a party involved with a distressed bank holding company may have seen in the last several years.