Last year we reported (here) that Alberta’s Redwater Energy Corporation decision signaled good news for lenders and noteholders secured by Alberta O&G assets because the federal Canadian Bankruptcy and Insolvency Act (“BIA”) prevailed over conflicting provisions in the provincial regulations promulgated by the Alberta Energy Regulator (“AER”).
Last year, we reported that Australia had proposed significant insolvency reforms that, in our view, are long overdue ("A Major Leap Forward for Australian Insolvency Laws").
On March 22, 2017, the Supreme Court, in Czyzewski et al., v. Jevic Holding Corp., et al., confirmed that the Bankruptcy Code does not permit “priority skipping” in Chapter 11 structured dismissals. In doing so, the Court held that, although the Code does not explicitly provide what, if any, priority rules apply to the distribution of estate assets in a Chapter 11 structured dismissal, “[a] distribution scheme in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the . . .
If your bank is in the process of a merger or has agreed to buy or sell a portfolio of mortgage loans, notices must be provided to the borrowers before and after the transaction closes. Care must be taken to determine the notices required and how they are worded to avoid violating potentially conflicting laws.
Reversing the lower courts, the Third Circuit Court of Appeals has today held that, under New York law (which governs 95% of all indentures), the early repayment of indenture notes in Chapter 11 is an optional redemption requiring the payment of make-whole notwithstanding the automatic acceleration of the notes due to the Chapter 11 filing. Delaware Trust Co. v. Energy Future Intermediate Holding Company LLC (In re Energy Future Holdings Corp.), Case No. 16-1251 (5th Cir. Nov. 17, 2016).
Prior to May 19, 2016, enforcing security against a financially-troubled O&G borrower in Alberta was a difficult proposition because the Alberta Energy Regulator (AER) had promulgated regulations to the effect that it would not license acquirers of producing wells unless potential environmental liabilities for the costs of abandonment, remediation and reclamation for non-producing wells were covered, either by the acquirer assuming the liabilities or posting the necessary R&R bonding.
The Bankruptcy Judges and Chapter 13 Trustees for the United States Bankruptcy Court for the Southern District of Ohio have reviewed and approved a proposed District Wide Mandatory Form Chapter 13 Plan and proposed form Order Confirming Chapter 13 Plan and Awarding Attorney Fees. Currently, the Dayton, Cincinnati, and Columbus Bankruptcy Courts use different Chapter 13 form plans. The use of these different form plans makes it difficult for practitioners and creditors to keep track of the particular requirements for each court location.
(Published in the Spring 2016 issue of The Bankers' Statement)
Introduction
Yesterday, Energy XXI Ltd. became the latest domestic oil and gas company to pursue a more deleveraged balance sheet via Chapter 11 restructuring. This does not come as a surprise to those following the company – for much of the last three months Energy XXI’s stock has been trading at less than $1.00 per share. According to the press release issued by the company, the filing comes after the company reached agreement with more than 63% of second lien note holders on the material terms of the restructuring.