On Jan. 19, 2019, the U.S. Court of Appeals for the Fifth Circuit vacated a bankruptcy court decision awarding Ultra Petroleum Corp. noteholders $201 million in make-whole payments and $186 million in post-petition interest. Under the note agreement, upon a bankruptcy filing, the issuer is obligated for a make-whole amount equal to the discounted value of the remaining scheduled payments (including principal and interest that would be due after prepayment) less the principal amount of the notes.
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The District Court for the Northern District of Texas recently held in Segner v. Ruthven Oil & Gas, LLC, No. 3:12-CV-1318-B, 2018 WL 3155827 (N.D. Tex. June 28, 2018) that failure to comply with a disclosure law when documenting a transaction does not deprive a defendant in a fraudulent transfer action from asserting a good faith defense.
What Happened?
The Bottom Line
The Bottom Line
The Bottom Line
In February 2017, Judge Katherine Polk Faila of the Southern District of New York issued a bench ruling1 in Cumulus Media Holdings Inc. v. JPMorgan Chase Bank, N.A. (S.D.N.Y. Feb. 24, 2017), in which she found that a proposed exchange of senior notes for revolver commitments would violate certain covenants of the issuer’s credit agreement protecting the term loan lenders.
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The Delaware District Court affirmed the bankruptcy court’s decision that the combination of a narrow arbitration provision and the bankruptcy court’s reservation of jurisdiction warranted denial of a motion to compel arbitration. The specific language of the arbitration provision, combined with the use of an accounting term of art, narrowed the scope of the arbitration provision sufficiently to rebut the presumption of arbitration under the Federal Arbitration Act.
What Happened?
An unexpected controversy has arisen recently in the high-yield bond market, one involving limiting the available remedies following default in the wake of last year’s decision by the Southern District of New York in Wilmington Savings Fund Society, FSB v.
On Jan. 17, the U.S. Court of Appeals for the Second Circuit vacated the decision of the District Court for the Southern District of New York in Marblegate Asset Management, LLC v.
A recent decision by an appeals court of the State of New York highlights the deceptive complexity of bringing non-contractual claims by or on behalf of noteholders under the seemingly boilerplate remedies provisions in trust indentures. At issue was the standard indenture language that defines the authority of a trustee to bring claims under the indenture, and in particular whether the trustee has the power to bring non-contractual claims under its own volition (not directed by a majority in principal amount of bondholders) against persons not party to the indenture.