Overview

In Highland Capital Mgmt. v. Dondero (In re Highland Capital Mgmt.), Case No. 21-03007-sgj (Bankr. N.D. Tex. 2021), the U.S. Bankruptcy Court for the Northern District of Texas held that a debtor could not be compelled to abide by an arbitration clause in an agreement that was rejected pursuant to Section 365 of the Bankruptcy Code.

Background

Voyager Aviation Holdings, LLC (Voyager) is a privately held aircraft owner and lessor with approximately $2 billion in assets. Voyager is headquartered in Dublin and has offices in Stamford, Connecticut.

Earlier this year, A&L Goodbody LLP advised Voyager on the successful restructuring of its senior note obligations.1 The restructuring was implemented by way of a US exchange offer that simultaneously solicited support for both a "plan B" Irish scheme of arrangement and a "plan C" prepack US Chapter 11.

Overview

In Hilal K. Homaidan v. Sallie Mae, Inc., Navient Solutions, LLC, Navient Credit Finance Corporation, Case No. 20-1981 (2d Cir. 2021), the Second Circuit affirmed the opinion of the U.S. Bankruptcy Court for the Eastern District of New York, which held that private student loans are not excepted from discharge under Section 523(a)(8)(A)(ii) of the Bankruptcy Code, which excepts from discharge “an obligation to repay funds received as an educational benefit, scholarship, or stipend.” 11 U.S.C. § 523(a)(8)(A)(ii).

Background

The Bottom Line

When is an insurance commissioner not a governmental authority? A federal district judge reminds us that a state insurance commissioner, when acting as receiver of an insolvent insurer, acts in a different capacity to his governmental role. This principle can cause an insurance commissioner to fall outside a contractual definition of “governmental authority” even where the definition contains inclusive language on multiple capacities.

Earlier today, 26 May 2021, the final condition to the restructuring plan for the Norwegian Air Shuttle group was met, allowing the Examiner’s scheme to become effective: confirmation that the business has successfully raised 6bn NOK.

Overview

In In re Nuverra Environmental Solutions, Inc., Case No. 18-3084, the Third Circuit affirmed the opinion of the District Court for the District of Delaware denying the confirmation appeal of an unsecured noteholder as equitably moot. In doing so, the Third Circuit (i) refused to allow a full-class recovery, as it would unscramble the substantially consummated plan, and (ii) refused an individualized payout to the bondholder, as it would unfairly discriminate against other members of the class in contravention of the Bankruptcy Code.

Bottom Line

In its recent decision in Mitchell v. Zagaroli, Adv. Pro. No. 20-05000, 2020 WL 6495156 (Bankr. W.D.N.C. Nov. 3, 2020), the Bankruptcy Court for the Western District of North Carolina held that the Chapter 7 trustee could step into the shoes of the IRS and utilize the IRS’ longer look-back period to avoid fraudulent transfers.

What Happened?

The Bottom Line

The Bottom Line

In In re CEC Entertainment, Inc., et al., 20-33163, 2020 WL 7356380 (Bankr. S.D. Tex. Dec. 14, 2020), the Bankruptcy Court for the Southern District of Texas held that the Bankruptcy Code does not permit the court to alter a debtor’s rent obligations beyond the 60-day post-petition period enumerated in Section 365(d)(3) of the code. However, the court declined to address the remedy for a violation of Section 365(d)(3).

What Happened?

Background