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"Trade away!" Bankruptcy Court for the Southern District of New York decides that original issue discount from fair value exchanges is allowable in bankruptcy

Debt exchanges have long been utilized by distressed companies to address liquidity concerns and to take advantage of beneficial market conditions. A company saddled with burdensome debt obligations, for example, may seek to exchange existing notes for new notes with the same outstanding principal but with borrower-favorable terms, like delayed payment or extended maturation dates (a "Face Value Exchange"). Or the company might seek to exchange existing notes for new notes with a lower face amount, motivated by discounted trading values for the existing notes (a "Fair Value Exchange").

USA, New York, Insolvency & Restructuring, Litigation, Jones Day, Bankruptcy, Debtor, Interest, Market liquidity, Debt, Fair market value, Second Circuit, United States bankruptcy court
Third Circuit reaffirms that section 1123(a) of the Bankruptcy Code preempts insurance policies’ anti-assignment provisions

Over the last two decades, many companies faced with excessive asbestos-related liabilities have successfully emerged from bankruptcy with the help of section 524(g) of the Bankruptcy Code, which channels all asbestos-related liabilities of the reorganized company to a newly formed personal injury trust. The injunctive relief codified in section 524(g) is modeled on the channeling injunction first crafted in the bankruptcy case of Johns-Manville Corporation, once the world’s largest producer of asbestos-containing products.

USA, Insolvency & Restructuring, Litigation, Faegre Drinker Biddle & Reath LLP, Injunction, Title 11 of the US Code, United States bankruptcy court, Third Circuit
History matters: historical breaches may undermine assumption of executory contracts

One of the primary fights underlying assumption of an unexpired lease or executory contract has long been over whether any debtor breaches under the agreement are “curable.” Before the 2005 amendments to the Bankruptcy Code, courts were split over whether historic nonmonetary breaches (such as a failure to maintain cash reserves or prescribed hours of operation) undermined a debtor’s ability to assume the lease or contract.

USA, Insolvency & Restructuring, Litigation, Jones Day, Bankruptcy, Debtor, Breach of contract, Federal Reporter, Franchise agreement, Default (finance), US Congress, Constitutional amendment, Title 11 of the US Code, Trustee, Ninth Circuit, First Circuit
Landlord who obtains prepetition warrant of eviction may be barred from recovering post-petition rent as administrative expense

A recent decision by the U.S. District Court for the
Southern District of New York concluded that a landlord
who obtains a judgment of possession and warrant of
eviction prepetition, yet is stayed from executing on the
warrant due to the debtor’s bankruptcy filing, may not be
entitled to post-petition rent as an administrative expense.
In In re Association of Graphic Communications, Inc., No. 07-
10278 (Bankr. S.D.N.Y. July 13, 2010), the court decided
that, under New York law, the prepetition warrant of

USA, New York, Insolvency & Restructuring, Litigation, Real Estate, Faegre Drinker Biddle & Reath LLP, Bankruptcy, Debtor, Landlord, Leasehold estate, Capital punishment, Warrant (finance), Westlaw, United States bankruptcy court, US District Court for the Southern District of New York