On May 24, 2012, the California Public Utilities Commission (CPUC) dismissed with prejudice a complaint brought by AT&T California, Inc. against Fones4All Corp. in 2006. AT&T sought to recover alleged overcharges paid to Fones4All for termination of intraLATA toll traffic. Following an evidentiary hearing, the CPUC issued D.07-07-013, granting the relief AT&T requested in its complaint, or approximately $2.6 million, plus interest.

In April 2011, the Ontario Court of Appeal rendered a unanimous judgment in Re Indalex Limited which ordered that the amount the debtor was required to contribute towards its pension plan wind up deficiency be paid in higher priority to repayments to its DIP lender. This judgment was a surprise to the legal community. Leave to appeal has since been granted by the Supreme Court of Canada. In November 2011, groups of White Birch employees and retirees (referred to below as employees) filed motions seeking the application of the legal findings of Indalex to White Birch.

Interim Financing Under the CCAA and “Roll-ups”

In a recent case, RBC Capital Markets, LLC v. Education Loan Trust IV et al., 2011 WL 6152282 (Del. Ch. Dec. 6, 2011), a holder of notes issued under an indenture claimed that the issuer caused the trust to pay excess and unauthorized fees that allegedly reduced the amount of interest payments to the noteholder.

Lenders should be cognizant that the granting of security by a debtor may be subject to challenge as a fraudulent preference in the event the debtor subsequently files for liquidation or proposal proceedings under the Bankruptcy and Insolvency Act (Canada) (the “BIA”) or restructuring proceedings under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”). Such risk arises if the debtor is insolvent the time the security was granted.

A years-long political duel over whether California should control local government bankruptcies was resolved on October 9, 2011. Chapter 9 of the Bankruptcy Code provides specifically for the reorganization of cities and towns, taxing districts, municipal utilities, and school districts. California Governor Jerry Brown (D) signed legislation prohibiting local municipalities from filing for bankruptcy unless they first negotiate with creditors using a “neutral evaluation process” or vote to declare a fiscal emergency after a public hearing.

As many of you know, on December 19, 2011, Saab Automobile AB and affiliated companies filed for bankruptcy in Sweden. The company issued a bulletin to its dealers that same day, announcing that it immediately suspended processing and payment of all claims, and it is suspending warranty coverage on all new Saab vehicles. What does this mean for dealers? Every dealer’s situation is different, and each dealer will have to evaluate its own circumstances based on consultation with an attorney.

• On December 20, 2011, the South Carolina Public Service Commission (SC PSC) issued a scheduling order for AT&T South Carolina’s complaint against Halo Wireless. AT&T alleges that Halo, which filed for bankruptcy protection after AT&T initiated this action and similar complaints in several other states, was sending AT&T landline-originated traffic but refused to pay terminating access charges. AT&T also alleges that Halo has been manipulating call signaling information to hide the traffic’s true origin and to make it appear as wireless-originated traffic.

• On October 12, 2011, the Bankruptcy Court for the Southern District of New York brought TerreStar Network’s Chapter 11 bankruptcy proceeding one step closer to conclusion by approving the debtor’s $98 million settlement with two separate creditor groups over a certain purchase money credit agreement.

Summary