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).
The Claim
Arjo Wiggins Appleton Limited (“AWA Limited”) was a wholly owned subsidiary of Sequana SA (the “Defendant”). BAT Industries Plc (“BAT Plc”), through a series of corporate acquisitions, became liable to pay for part of an environmental clean-up operation in the USA. AWA Limited was also liable to indemnify BAT Plc for part of that liability.
In December 2008, AWA Limited’s directors signed a solvency statement confirming that, in the opinion of the directors;
The Insolvency (England and Wales) Rules 2016 (the “2016 Rules”) were published on 18 October 2016 and laid before Parliament on 25 October 2016. The 2016 Rules are due to come into force with effect from 6 April 2017. The 2016 Rules are the product of an extensive programme of consultation with a range of parties, including the insolvency profession, creditor representatives, insolvency regulators and public bodies. The aim was to streamline the process and reduce regulation with the ultimate goal of increasing returns to creditors.
The Claim
In an earlier Judgment the Court at first instance ruled that Countrywide Surveyors Limited (the “Defendant”) was liable in deceit to Mortgage Express (the “Claimant”), in relation to 39 loans, further to property valuations produced by the Defendant.
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 Commercial Court recently held that the Defendant, a former majority beneficial owner of the Claimant bank, had acted dishonestly and in breach of duties owed to the Claimant in causing the Claimant to advance monies in eight transactions which had not been repaid or recovered, to a borrower closely connected to the Defendant
Background
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.
Australia is making several significant reforms to its insolvency legislation – with more changes likely to come – to provide much-needed comfort for directors and to align legislation on ipso facto clauses in order to prevent contractual terminations simply as a result of the commencement of an insolvency proceeding. (See the Productivity Commission Report on Business Set-up, Transfer and Closure (available here)).
We previously posted about a recent effort to address an issue left unresolved in Baker Botts v. ASARCO, 135 S. Ct.