On November 17, 2016, the Third Circuit Court of Appeals issued a highly anticipated ruling in the chapter 11 reorganization of Energy Future Holdings Corp. ("EFH"), invalidating one of the aspects of EFH’s confirmed chapter 11 plan. InDel. Tr. Co. v. Energy Future Intermediate Holding Co. LLC (In re Energy Future Holdings Corp.), 842 F.3d 247 (3d Cir. 2016), a three-judge panel of the Third Circuit reversed lower court rulings disallowing the claims of EFH’s noteholders for hundreds of millions of dollars in make-whole premiums allegedly due under their indentures.
In a September 18, 2015 order, the U.S. District Court for the Southern District of New York affirmed a bankruptcy court order denying administrative claim treatment to Hudson Energy Services, LLC (“Hudson”) for its retail sales of electricity to the debtor.1 The decision does not address any “safe-harbor” or forward contract issues, but is among a number of decisions providing for inconsistent treatment of such sales.
In a recent decision related to the SemCrude bankruptcy, the federal district court upheld the Bankruptcy Court’s rulings on the efficacy of certain common risk-mitigation tools used in the energy trading and marketing business – namely product payment netting and cross-product setup upon liquidation and closeout. The decision comes amid long-running challenges from producers who had sold product to the SemGroup entities on credit.
Krol v. Key Bank National Association, et al. (In re MCK Millenium Centre Parking, LLC), Adv. No. 14-00392 (N.D. Ill. Apr. 24, 2015)
J. Paul Getty once said, “Formula for success: rise early, work hard, strike oil.” However, with crude oil prices nearly half of what they were a mere six months ago, Getty’s formula may not hold as true as it once did. In the latest EIA STEO Report (April 2015), the DOE projects oil prices for WTI to remain around or below $60 per barrel for the balance of 2015 and grow to $70 per barrel in 2016.
On May 30, 2014, hedge fund Moore Capital (Moore) brought suit against the Lehman Brothers bankruptcy estate (Lehman) in the Southern District of New York bankruptcy court, seeking a declaratory judgment that it acted properly when it terminated swap agreements and setoff termination amounts in the time between the filing of the parent company Lehman Brothers Holdings Inc. (LBHI) and the eve of bankruptcy filings weeks later of Moore’s Lehman counterparties1.
Sales of assets pursuant to Section 363 of the Bankruptcy Code or pursuant to a plan of reorganization provide a number of benefits to a purchaser, but they also present a number of potential impediments, particularly to purchasers who are not familiar with the bankruptcy sale process.
It is broadly accepted that the abbreviated deadline for a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to assume or reject an unexpired lease of nonresidential real property with respect to which the debtor is the lessee does not apply to executory contracts or unexpired leases of residential real property or personal property.
The "common interest" doctrine allows attorneys representing different clients with aligned legal interests to share information and documents without waiving the work-product doctrine or attorney-client privilege. Issues involving the common-interest doctrine often arise during the course of a business restructuring, because restructurings tend to involve various constituencies, including the company, the official committee of unsecured creditors, secured debt holders, other creditors, and equity holders whose legal interests may be aligned at any one time.
The early 2000s witnessed a wave of chapter 11 filings by entities with liability for asbestos personal-injury claims. The large number of filings was matched by the variety of legal strategies that companies pursued to address their asbestos liabilities in chapter 11. The chapter 11 case of Quigley Company, Inc. ("Quigley"), was one of the last large asbestos cases to file in the 2000s and represents one of the more interesting strategies for dealing with asbestos liabilities in chapter 11.