Why Lawyers Need to Pay More Attention to the Distinctions Between Veil-Piercing and Alter-Ego Theories

Two recent decisions of the US District Court for the Southern District of New York may complicate future debt exchange offers. The cases address the validity, under the Trust Indenture Act of 1939, as amended (the Act), of indenture amendments that delete substantive covenant protections in the context of out-of-court debt restructurings. Such amendments are a common feature of debt exchange and cash tender offers and are often essential to achieve a restructuring outside of bankruptcy court.

With the near-historic drop in oil prices, distressed investors are evaluating a myriad of investment opportunities in the oil industry and related fields. One particular area of focus when analyzing these energy-related opportunities are the master limited partnerships that many energy companies utilize in their corporate structure.

Drop in Oil Prices

The House of Representatives passed the Financial Institution Bankruptcy Act of 2014 (H.R. 5421) on December 1, 2014.  The bill, if enacted, would add provisions to the U.S. Bankruptcy Code, including a new "subchapter V" of chapter 11, under which "covered financial institutions" would be eligible to be debtors in a chapter 11 bankruptcy case.   

In his November 20, 2014 decision in CanaSea PetroGas Group Holdings Limited (Re), Sharpe J.A. of the Ontario Court of Appeal did not accept the respondents’ submissions that he should decline to hear an application for leave to appeal a CCAA decision because only a three-judge panel should hear such an application.

First in a Series of Articles on Bankruptcy Issues

For many investors, business bankruptcy is a mysterious black box that chews up investor and creditor value and then spits out assets or, occasionally, a reorganized operating company. In this series of articles, we are going to open up that box and shed some light on the processes of bankruptcy. After all, you never know what business will file next. It is best to have some understanding of the nature of the game – and to be as well-armed as possible.

The test for an extension of time to serve and file a late Notice of Appeal in Ontario is well-established in the case law:

Originally appeared in the August 2014 issue of The Bankruptcy Strategist.

Today, the Supreme Court of Canada denied a group of investors leave to appeal the approval of a settlement releasing Ernst & Young LLP from any claims arising from its auditing of Sino-Forest Corporation. The settlement is part of Sino-Forest’s Plan of Compromise and Reorganization following a bankruptcy triggered by allegations of corporate fraud.

The Settlement

Which law firm is rumored to be failing this week, and who will be next? Although, inevitably, the target firms insist that retaining bankruptcy counsel does not mean a filing is imminent, such legal industry headlines are catnip for strong firms hoping to bolster their own talent by luring lateral hires away from weak ones. With those opportunities, however, comes the real risk of being sued later by the failed firm’s bankruptcy trustee.