In Quadrant Structured Products Company, Ltd. v. Vertin (October 1, 2014), Vice Chancellor Laster clarified the Delaware Chancery Court’s approach to breach of fiduciary duty derivative actions brought by creditors against the directors of an insolvent corporation.
On September 26, 2014, the United States Court of Appeals for the Second Circuit, overturning decisions by the Bankruptcy Court and the District Court for the Southern District of New York, held that the Bankruptcy Court was required to review under section 363 of the Bankruptcy Code the transfer of a claim by a chapter 15 debtor with a recognized foreign main proceeding pending in the British Virgin Islands (the “BVI”).1 In a case under chapter 15 of the Bankruptcy Code in which a foreign main proceeding has been recognized, section 1520(a)(2) of the Bankr
In a recent bench decision in In re MPM Silicones, LLC et al., Case No. 14-22503-RDD (Bankr. S.D.N.Y. August 26, 2014), the Bankruptcy Court considered bondholders’ right to recover make-whole premiums (premiums paid for early repayment of debt) upon the payment of accelerated debt following the borrower’s bankruptcy default. The Court ruled that the governing loan documents lacked specific language requiring a make-whole premium upon acceleration.
On August 26, 2014, the Honorable Robert D. Drain, Bankruptcy Judge of the United States Bankruptcy Court for the Southern District of New York, issued several bench rulings (the “Bench Rulings”) in connection with confirmation of a plan of reorganization in the chapter 11 cases of MPM Silicones, LLC, et al.
On August 11, Franklin Funds and Oppenheimer Rochester Funds filed a second amended complaint, opposition to motion to dismiss and cross-motion for summary judgment in the litigation they previously filed in the United States District Court for Puerto Rico challenging the constitutionality and validity of Puerto Rico’s so-called Recovery Act. The second amended complaint reiterates that a PREPA filing under the Recovery Act, which establishes debt adjustment procedures for most of Puerto Rico’s public corporations, is both “probable and imminent.” The summary judgment motion see
The Commonwealth of Puerto Rico and the Puerto Rico Electric Power Authority (PREPA) yesterday filed separate motions to dismiss the federal court complaint filed last month by some PREPA bondholders seeking to invalidate the recently-enacted Puerto Rico Public Corporation Debt Enforcement and Recovery Act.&n
On June 27, 2014, in National Heritage Foundation, Inc. v. Highbourne Foundation, 1 the United States Court of Appeals for the Fourth Circuit, agreeing with decisions by the Bankruptcy Court for the Eastern District of Virginia and the District Court for the Eastern District of Virginia, which were issued upon remand from a prior appeal, held that the third-party non-debtor release provision in the chapter 11 plan of reorganization of National Heritage Foundation, Inc. was invalid.
For municipal bond investors and insurers, recent events in Puerto Rico have become a major concern. Puerto Rico has tried to address its mounting debt crisis by enacting legislation that would create, in effect, a quasi-bankruptcy court to provide restructuring relief for certain public corporations that have issued revenue bonds, including the Puerto Rico Electric Power Authority, the Puerto Rico Aqueduct and Sewer Authority and the Puerto Rico Highways and Transportation Authority.
Substantial Contribution to the Case
On Saturday, June 28, Puerto Rico’s Governor Padilla signed into effect Puerto Rico’s new bankruptcy law for certain revenue bond issuers. Within 24 hours of the statute’s enactment, two mutual fund complexes owning approximately $1.7 billion in bonds of the Puerto Rico Electric Power Authority (PREPA) filed a complaint in the federal district court for Puerto Rico, seeking a declaratory judgment invalidating the fledgling legislation.