Executive Summary

On December 27, 2018, the United States Bankruptcy Court for the District of Delaware issued an opinion in In re La Paloma Generating Co., Case No. 16-12700 (Bankr. D. Del. Dec. 27, 2018) [Docket No. 1274], that should raise substantial concerns for junior secured creditors.

In particular, the La Paloma opinion determined that:

In the course of fewer than 60 days this summer, the North American automotive industry was fundamentally reorganized and restructured as both General Motors and Chrysler reorganized under Chapter 11 of the United States Bankruptcy Code. Ford was the only one of the “Big 3” not involved in a Court-driven restructuring. Both General Motors and Chrysler, of course, had and indeed continue to have substantial operations in Canada and the Canadian operations were a critical part of the overall restructuring of both companies.