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.
There has been much discussion concerning the recent district court appellate decision in Purdue Pharma. See In re Purdue Pharma, Case No. 21 cv 7532 (Master Case), 2021 WL 5979108 (S.D.N.Y. Dec. 16, 2021). We have been tracking developments relating to Purdue Pharma and issues concerning third-party releases: Purdue Pharma: Is Protection of Third Parties by the Automatic Stay an Oxymoron?
Since the beginning of the COVID-19 pandemic and in 2020 alone, approximately 7,300 companies filed for Chapter 11 bankruptcy.[1] Of those, forty-two awarded pre-bankruptcy retention bonuses to 223 executives, totaling approximately $165 million.[2] These p
A recent decision by the Court of Appeals for the Third Circuit affirming the decisions of both the bankruptcy and district courts, provides an interesting analysis of “willful” violations of the automatic stay under Section 362 of the Bankruptcy Code. See California Coast Univ. v. Aleckna (In re Aleckna), No. 20-1309 (3d Cir. 2021).
It is said that the word bankruptcy originated in the middle ages from the term “breaking the bench.” At that time, rupturing a craftsman’s bench was the punishment for defaulting. Later, debtors were punished for their failure to pay their debts through imprisonment. Neither approach helped the creditor. Rather, it punished those dependent upon the debtor for support. In the late 19th Century, the American system of bankruptcy was created to break from these policies and provide debtors a fresh start.
Once again, a bankruptcy court has weighed in on the subject of discharging student loan debt in the context of a chapter 7 proceeding.
The United States Bankruptcy Court for the District of New Mexico added its voice to the split in judicial authority on whether a lien or similar transfer can be avoided under sections 544, 547, 548 and 549 of the Bankruptcy Code where only the debtor itself may benefit from the avoidance. Judge Thuma in his recent decision in U.S. Glove, Inc. v. Jacobs (In re U.S. Glove, Inc.), AP No. 21-1009, 2021 WL 2405399 (Bankr. D. N.M.
Over the past year, the Covid-19 pandemic upended many industries. While the construction industry has largely been able to operate throughout the pandemic, albeit with increased and ever-changing restrictions on jobsites, one consequence of these disruptions may be an increase in construction-related bankruptcy filings. Already in 2021, there have been over 70 construction-related bankruptcy filings across the country. For many property owners and real estate developers, these filings create a nightmare scenario where work may slow or even stop entirely.