Several recent cases in the United States District Court for the Southern District of New York have created ambiguity about when distressed exchange offers violate Section 316(b) of the 1939 Trust Indenture Act (the “TIA”). It appears that plaintiffs’ lawyers are using this ambiguity to challenge distressed exchange offers. The threat of litigation may give minority bondholders a powerful tool to hinder less than fully consensual out-of-court restructurings and provide them with increased leverage in negotiations.
USA, New York, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bond (finance), Unsecured debt, Interest, Limited liability company, Debt, Maturity (finance), Debt restructuring, Secured loan, Second Circuit, US District Court for the Southern District of New York
The Bottom Line:
USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Collateral (finance), Limited liability company, Liquidation, Liquidator (law), Unsecured creditor, Third Circuit
The Bottom Line:
USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Debtor, Limited liability company, US Code, United States bankruptcy court, Seventh Circuit
The Bottom Line:
USA, Insolvency & Restructuring, Litigation, Real Estate, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Surety, Debtor, Limited liability company, Foreclosure, Joint and several liability, US Code, Trustee, Ninth Circuit, United States bankruptcy court