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SDNY Bankruptcy Court allows as a claim unamortized original issue discount generated in a fair market value exchange

The Bankruptcy Court for the Southern District of New York overseeing the Residential Capital (“ResCap”) cases issued an opinion on November 15, 2013 (the “Opinion”)2 allowing the unamortized interest associated with original issue discount (“OID”) that was generated in a fair market value exchange and claimed by ResCap’s junior secured noteholders (the “Holders”). While the OID ruling is only one component of the Opinion,3 it may have far reaching implications, as already evidenced in the pricing of other OID notes that were the product of fair market value exchanges.

USA, New York, Insolvency & Restructuring, Litigation, Dechert LLP, Bankruptcy, Interest, Fair market value, Second Circuit, United States bankruptcy court, US District Court for the Southern District of New York
Nortel/Lehman: moral hazard powers are a provable debt

Summary

On 24 July 2013, the Supreme Court handed down its long-awaited judgment in the Nortel/Lehman case: Re Nortel Companies [2013] UKSC 52. The Court looked at the position where a contribution notice (CN) or financial support direction (FSD) was issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings in England (eg administration). How does the relevant obligation rank in the order of priority of payment?

United Kingdom, Insolvency & Restructuring, Litigation, Freshfields Bruckhaus Deringer, Debt, The Pensions Regulator (UK), Lehman Brothers, Pensions Act 2004 (UK), Court of Appeal of England & Wales, UK Supreme Court
Nortel/Lehman: Supreme Court rules on how the pensions regulator’s moral hazard powers apply against a company in insolvency

 

Snapshot

The Supreme Court handed down its long-awaited judgment today in the Nortel/Lehman case on where a contribution notice (CN) or financial support direction (FSD) issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings (eg administration) ranks in the order of priority of payment.

United Kingdom, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Freshfields Bruckhaus Deringer, Debt, The Pensions Regulator (UK), Supreme Court of the United States
Olympic Airlines: starting UK insolvency proceedings against a company already in insolvency in another member state.

 Summary

The Court of Appeal’s judgment in The Trustees of the Olympic Airlines SA Pension & Life Insurance Scheme v Olympic Airlines SA [2013] EWCA Civ 643 has clarified what is required to fall within the definition of an ‘establishment’ for the purposes of the EC Insolvency Regulation (the Insolvency Regulation).

European Union, United Kingdom, Aviation, Insolvency & Restructuring, Litigation, Freshfields Bruckhaus Deringer, Pension Protection Fund, Pensions Act 2004 (UK), Court of Appeal of England & Wales
The Delaware Bankruptcy Court confirms that lenders in multiple-level financing structures are entitled to the protections of corporate separateness

The Delaware Bankruptcy Court has confirmed that in multiple-debtor chapter 11 cases, the cramdown rules set forth in section 1129(a)(10) of the Bankruptcy Code must be applied on a per debtor basis as opposed to a per plan basis. See In re JER/Jameson Mezz Borrower II, LLC, No. 11-13338 (MFW), 2011 WL 6749058 (Bankr. D. Del. Dec. 22, 2011) (“Jameson”) and In re Tribune Co., No. 08-13141 (KJC), 2011 WL 5142420 (Bankr. D. Del. Oct. 31, 2011) (“Tribune”).

USA, Delaware, Insolvency & Restructuring, Litigation, Dechert LLP, Bankruptcy, Debtor, Title 11 of the US Code, United States bankruptcy court