Whilst commonplace in the U.S., uptier transactions in which a borrower teams up with a subset of creditors to issue new “super priority” debt by amending or exchanging existing debt documents, have not been widely used in Europe.
However, with increasing macro economic pressures and financial market instability, we may see more European borrowers taking advantage of flexibility in cov-lite debt documentation to implement liability management transactions as an alternative to, or even as part of, more formal restructurings.
This week, the Ninth Circuit addresses whether text messages can violate the Telephone Consumer Protection Act’s prohibition on “prerecorded voice” messages, and it considers whether debtors who paid statutory fees under an unconstitutionally nonuniform bankruptcy provision are entitled to a refund.
2023 has been a remarkable year with the past several months displaying an upward trend for the Business Restructuring + Insolvency Group at Morrison Foerster. We would like to provide our friends and clients with an overview of our current matters, each of which demonstrate our track record of being a go-to firm for complex restructurings across industries and jurisdictions.
Summary of Purdue Pharma, L.P. v, City of Grand Prairie (In re Purdue Pharma, L.P.), No. 22–110 – Bk (2d Cir. May 30, 2023)
If at first you don’t succeed, try (and maybe try) again.
Basic Facts: Nomenclature and Numbers
When a previously reorganized debtor files a second chapter 11 case, courts and commentators refer to that continued entity’s second reorganization as a “chapter 22.” When a third case follows a second, “chapter 33” is a favored colloquialism; when a fourth, “chapter 44” is the name of choice. In practice, however, industry figures often denominate any repeat bankruptcy as a “chapter 22.”
In two cases in as many months, the Supreme Court tackled the application of sovereign immunity in two separate insolvency statutes. Two separate government-like entities suffered conflicting fates while the Court (arguably) employed the same analysis. How so?
Clear Statement Rule
Summary
In the latest decision of the Hong Kong court to consider the interplay between arbitration clauses and winding-up or bankruptcy petitions, on 22 May 2023, the Hon. Linda Chan J (the Judge) made a winding-up order against Simplicity & Vogue Retailing (HK) Co. Limited (the Company) and rejected the Company’s argument that the dispute over the underlying debt should be referred to arbitration.
This week, the Court considers a property owner’s claim to an easement over a maintenance road on federal land, and casts doubt on the longstanding “person aggrieved” standing requirement in bankruptcy appeals.
KIMBALL-GRIFFITH, L.P. v. BRENDA BURMAN, ET AL
The Court rejects a property owner’s claim to an easement over a maintenance road on federal land.
Congress passed the operative texts without noticeable fanfare. From its enactment to today, section 363(k) has entitled a secured creditor to “credit bid” the full amount of the debt owed by a debtor in any sale of the underlying collateral pursuant to section 363(b). That this statutory bequest elicited little debate made imminent sense, for Congress had thereby codified one of secured creditors’ seemingly time-honored rights.