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Marblegate: what does it mean for European restructurings?

In a highly-anticipated decision on a long-running bondholder dispute, the US Court of Appeals for the Second Circuit issued its judgment last week in Marblegate Asset Management LLC v Education Management Corp. It concluded that “Section 316(b) [of the US Trust Indenture Act 1939] prohibits only non-consensual amendments to an indenture’s core payment terms”, i.e. the amount of principal and interest owed and the maturity date.

European Union, USA, Capital Markets, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Bankruptcy, Consideration, Second Circuit
First Circuit finds that a private equity fund can be liable for the pension obligations of its portfolio company

In Sun Capital Partners III, L.P. et al. v. New England Teamsters & Trucking Industry Pension Fund, No. 12-2312, 2013 WL 3814985 (1st Cir. July 24, 2013), the First Circuit held that a private equity fund could be liable for its bankrupt portfolio company’s withdrawal liability imposed under Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) on the basis of the private equity fund constituting a “trade or business” under ERISA’s controlled group rules.

USA, Corporate Finance/M&A, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Sheppard Mullin Richter & Hampton LLP, Bankruptcy, Employee Retirement Income Security Act 1974 (USA), Liability (financial accounting), Sun Capital Partners, Pension Benefit Guaranty Corporation, First Circuit