Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.
Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.
On October 17, 2022, Justice Andrea Masley of the NY Supreme Court issued a decision and order denying all but one of the motion to dismiss claims filed by Boardriders, Oaktree Capital (an equity holder, term lender, and “Sponsor” under the credit agreement), and an ad hoc group of lenders (the “Participating Lenders”) that participated in an “uptiering” transaction that included new money investments and roll-ups of existing term loan debt into new priming debt that would sit at the top of the company’s capital structure.
On October 14, 2022, the Fifth Circuit issued its decision in Ultra Petroleum, granting favorable outcomes to “unimpaired” creditors that challenged the company’s plan of reorganization and argued for payment (i) of a ~$200 million make-whole and (ii) post-petition interest at the contractual rate, not the Federal Judgment Rate. At issue on appeal was the Chapter 11 plan proposed by the “massively solvent” debtors—Ultra Petroleum Corp. (HoldCo) and its affiliates, including subsidiary Ultra Resources, Inc.
On July 6, Delaware Bankruptcy Court Judge Craig T. Goldblatt issued a memorandum opinion in the bankruptcy cases of TPC Group, Inc., growing the corpus of recent court decisions tackling “uptiering” and other similar transactions that have been dubbed by some practitioners and investors as “creditor-on-creditor violence.” This topic has been a hot button issue for a few years, playing out in a number of high profile scenarios, from J.Crew and Travelport to Serta Simmons and TriMark, among others.
The High Court recently considered whether a creditor can be a victim to, and obtain relief for, a transaction which is reversed before the claim is even brought and the creditor is put back to the position they were in before the transaction took place.
Timeline
In Arlington v Woolrych, the failure by a junior creditor to gain the prior written consent of senior creditors pursuant to a Deed of Priority rendered the appointment of administrators invalid.
Facts
High Street Rooftop Holdings Limited (the Company) was part of a group of companies known as the High Street Group, which carried on real estate activities such as the development of residential apartments and construction, and the ownership of hotels, bars and restaurants.
On 13 June 2018, the Company entered into a secured term loan facility agreement with Strategic Advantage SPC as lender (the Lender) (the Facility Agreement). Under the Facility Agreement, the Applicant made funding of approximately £100 million available to the Company in tranches.
On August 26, 2020, the Court of Appeals for the Third Circuit held that the Bankruptcy Code does not require subordination agreements to be strictly enforced in order for a court to confirm a cramdown plan, so long as the plan does not discriminate unfairly.
Facts
Centenary Homes Limited (C) was a property development company which acquired two blocks of flats: one in Enfield and the other in Bloomsbury. The Bank of Scotland (BOS) extended secured finance to C for the development of the two properties.
C defaulted on its repayment obligations in 2012 and fixed charge receivers were appointed in March, when the balance outstanding was approximately £4.4 million.
The receivers were able to sell the Enfield flats in July 2012, for £3,250,000.