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Prepayment premium claims disallowed by bankruptcy courts

Recent case law reminds practitioners and lenders to pay careful attention when drafting prepayment premium provisions in debt instruments or risk having the premiums disallowed in a borrower’s bankruptcy case.

USA, Insolvency & Restructuring, Litigation, Alston & Bird LLP, Maturity (finance), United States bankruptcy court
Intercreditor agreements in bankruptcy

In In re MPM Silicones, LLC, Case No. 14-22503 (RDD) (Bankr. S.D.N.Y. Sept. 30, 2014) (Momentive), the court dismissed a senior lien creditors’ suit alleging that the junior lien creditors breached an intercreditor agreement (ICA) with respect to shared collateral by taking and supporting certain actions adverse to the senior lien creditors.

BACKGROUND

USA, Insolvency & Restructuring, Litigation, Alston & Bird LLP, Collateral (finance)
Changes to the Uniform Fraudulent Transfer Act approved

Introduction

Change of name

Choice of law

USA, Insolvency & Restructuring, Caplin & Drysdale, Chartered, Choice of law
Supreme Court on powers of bankruptcy courts after Stern

Introduction

USA, Insolvency & Restructuring, Litigation, Caplin & Drysdale, Chartered, Supreme Court of the United States, United States bankruptcy court
Third Circuit rules failure to appeal leaves union and its retirees without a remedy

On August 28, 2014, the Court of Appeals for the Third Circuit[1] delivered a stern admonition about the risk of failing to appeal when it ruled that a union that had not filed a notice of appeal could not benefit from a successful appeal by another union in the same matter.

USA, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Caplin & Drysdale, Chartered, Trade union, Third Circuit
Litigation claimants get a second chance in bankruptcy appeal

On June 17, 2014, a three-judge panel of the Third Circuit Court of Appeals1 vacated a District Court’s dismissal order and resuscitated a bankruptcy appeal brought by a group of litigation creditors seeking recourse against the debtors post-confirmation.2 The Third Circuit opinion is an important reminder to both debtors and creditors that the doctrine of “equitable mootness” has limits and that confirmation of a plan does not preclude review of post-confirmation actions inconsistent with obligations in the plan.

USA, Insolvency & Restructuring, Litigation, Caplin & Drysdale, Chartered, Third Circuit
The tale of breadcrumbs: Eighth Circuit finds trademark license no longer executory in Interstate brands case

In Lewis Brothers Bakeries, Inc. and Chicago Baking Co. v. Interstate Brands Corp. (2014 WL 2535294 (8th Cir. June 6, 2014)), the United States Court of Appeals for the Eighth Circuit, sitting en banc, held that a perpetual, royalty-free, assignable, transferable, exclusive trademark license granted in connection with a substantially consummated asset purchase agreement was not an executory contract that could be assumed or rejected by the licensor-debtor in bankruptcy.

USA, Insolvency & Restructuring, Litigation, Trademarks, Alston & Bird LLP, Eighth Circuit
Limitations on corporation's ability to free itself from legacy liabilities

Introduction
Procedural background
Facts
Statute of limitations
Actual fraudulent conveyance
Settlement
Comment

USA, Insolvency & Restructuring, Caplin & Drysdale, Chartered
Creditor standing to bring third-party actions outside bankruptcy proceedings

Introduction
Background
Third Circuit's majority opinion
Dissent
Analysis
Successor claims as property of the estate

USA, Insolvency & Restructuring, Litigation, Caplin & Drysdale, Chartered, Bankruptcy
Jurisdictional limits on recognition of foreign non-debtor releases

Introduction
Background
Release of non-debtors in US bankruptcy proceedings
Recognition and enforcement of foreign non-debtor releases
Limits on bankruptcy jurisdiction

USA, Insolvency & Restructuring, Litigation, Caplin & Drysdale, Chartered, Debtor, Injunction