Proceedings from the Courts’ seminar on the homologation of refinancing agreements clarify some material uncertainties.

Background

Frank Grell is a partner at Latham & Watkins who chairs the firm’s German Restructuring and Insolvency Practice. Grell reflects on some of the major changes brought about by Germany’s 2012 Insolvency Act (Insolvenzordnung), including an increase in the rights of creditors in the proceedings over the assets of German companies, the introduction of “protective shield” proceedings and a reduction in the negative stigma previously associated with restructuring and insolvency.

The Spanish Congress has approved important amendments into the so-called Spanish scheme of arrangements, to facilitate Spanish company refinancings.

An employer that sponsors a single-employer defined benefit pension plan was acquired by a Japanese parent.  The employer entered into bankruptcy and, as part of the proceedings, the Pension Benefit Guaranty Corporation (the “PBGC”) terminated the pension plan.  The PBGC then sought in federal court to recover the amount of the unfunded liability from the Japanese parent.  The PBGC also sought payment of the termination premium designed to be payable when a reorganizing company emerges from bankruptcy and to collect that premium from the parent.  The pare

On July 24, 2013 the First Circuit Court of Appeals, applying an “investment plus” test, concluded that a Sun Capital private equity investment fund was engaged in a “trade or business” for purposes of determining whether the fund could be jointly and severally liable under ERISA for the unfunded pension withdrawal liability of the portfolio company.¹ Two Sun Capital investment funds, conveniently named Sun Capital Partners III, LP (“Fund III”) and Sun Capital Partners IV, LP, (“Fund IV”) (the “Sun Funds”) collectively owned 100 percent of Scott Brass, Inc.

Relief for lenders and administrators as UK Supreme Court reverses “super-priority” status of pensions liabilities in insolvency ranking.

Second Circuit’s Quebecor bankruptcy decision offers comfort to capital markets participants that certain transactions will qualify for the Section 546(e) safe harbor.

Delaware Bankruptcy Court Holds that Private Equity Firm And Its Portfolio Company Are Not Liable Under Federal WARN Act

The absolute priority rule ordinarily prevents a Chapter 11 debtor from distributing any money or property to junior creditors and old equity investors unless all senior creditors have first been paid in full. See 11 U.S.C. § 1129(b)(2)(B)(ii). Nevertheless, old equity investors may attempt to receive new equity in the reorganized debtor in consideration for providing new (post-bankruptcy) investments in the debtor.

Your good client Michael Bluth calls you from the Delaware bankruptcy court. Now that his family’s business, The Bluth Company, has filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code and his late nights with DIP lenders and our bankruptcy colleagues have come to a temporary pause, Michael’s ready to turn back to his typical day-to-day job running his business.