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NRA Bankruptcy Dismissed for Lack of Good Faith in Filing

The Bankruptcy Court for the Northern District of Texas dismissed the National Rifle Association’s (“NRA”) bankruptcy case on May 11, finding that the case was not filed in good faith. In his opinion, Judge Harlin Hale found that there was cause for dismissal because the case was filed “to gain unfair litigation advantage and … to avoid a state regulatory scheme,” neither of which he considered to be a purpose intended or sanctioned by the Bankruptcy Code.

USA, Texas, Insolvency & Restructuring, Litigation, Mayer Brown, Bankruptcy
Opinion of Interest - In re United Refining Company: Destruction of Records and the Accrual of Tort Claims

In a January 2021 decision issued in the re-opened United Refining Company1 bankruptcy case, Judge Lopez of the Southern District of Texas Bankruptcy Court addressed when a tort claim is deemed to arise for purposes

USA, Insolvency & Restructuring, Litigation, Mayer Brown, Bankruptcy
The NRA Bankruptcy: What You Need to Know About the National Rifle Association’s Recent Chapter 11 Filing

The National Rifle Association (“NRA”), along with its wholly owned Texas subsidiary, filed for chapter 11 bankruptcy protection on January 15, 2021 in the Bankruptcy Court for the Northern District of Texas. The case already has presented several threshold issues and challenges that are of interest to both bankruptcy practitioners and the market as a whole.

Background

USA, Texas, Insolvency & Restructuring, Litigation, Mayer Brown, Bankruptcy
US Bankruptcy Fee Flip: Legal Expenses for Unsecured Creditors; Considerations for Lenders and Administrative Agents

With a slowdown in capital markets activity and sharply decreased economic activity, the pressures on borrowers (and therefore their lenders) are only going to increase in the near term.

USA, Insolvency & Restructuring, Mayer Brown
Are Power Purchase and Similar Agreements Excluded from the Automatic Stay under the Safe Harbor for Forward Contracts? Recent US Utility Bankruptcies Raise This and Other Important Questions

Both the First Energy Solutions and PG&E bankruptcies have seen proceedings regarding power purchase and similar agreements (PPAs) that raise this question.

Background

Contracts often contain provisions that enable a party to terminate or modify the contract based on the other party's bankruptcy filing, insolvency or deteriorating financial condition. In general, the Bankruptcy Code renders these types of provisions (sometimes referred to as "ipso facto" clauses) ineffective. Specifically, under section 365(e)(1) of the Bankruptcy Code (emphasis added):

USA, Derivatives, Insolvency & Restructuring, Litigation, Mayer Brown, Title 11 of the US Code, United States bankruptcy court
US FDIC and SEC Propose Rules to Govern the Orderly Liquidation of Covered Broker-Dealers under Title II of the Dodd-Frank Act

On February 17, 2016, the Federal Deposit Insurance Corporation (“FDIC”) and the Securities and Exchange Commission (“SEC”) (collectively, the “agencies”) jointly proposed a rule to supplement the statutory provisions of Title II of the Dodd-Frank Act (the “Orderly Liquidation Authority” or “OLA”) that govern the orderly liquidation of a “covered broker or dealer”—i.e., an SEC-registered broker or dealer that is a member of the Securities Investor Protection Corporation (“SIPC”) and for which a systemic risk determination to trigger the application of the OLA has been made.

USA, Banking, Capital Markets, Insolvency & Restructuring, Mayer Brown, US Securities and Exchange Commission, Federal Deposit Insurance Corporation (USA), Securities Investor Protection Corporation, Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 (USA)