On May 21, 2015, the United States Court of Appeals for the Third Circuit, in a 2-1 opinion, recognized a Chapter 11 bankruptcy case could be dismissed through a “structured dismissal” that deviates from the priority scheme set forth in Section 507 of the Bankruptcy Code.1 With its decision, the Third Circuit joined the Second Circuit in rejecting the Fifth Circuit’s per se exclusion on “structured dismissals” that deviate from the Bankruptcy Code’s prio
As the market for so-called “unitranche” credit facilities continues to increase, the Delaware Bankruptcy Court had an opportunity recently to answer positively the question of whether bankruptcy courts will enforce the Agreement Among Lenders (“AAL”) (a form of intercreditor agreement) used in such structures.
Background: Grupo OAS, a Brazilian construction conglomerate linked to a massive corruption scandal (“OAS”), filed for Chapter 15 creditor protection in the Bankruptcy Court for the Southern District of New York on April 15, 2015, two weeks after entering bankruptcy in Brazil. If “recognized” by Bankruptcy Judge Stuart Bernstein, the Chapter 15 petition would, among other things, essentially bind OAS creditors in the United States to the restructuring terms approved by the Brazilian court overseeing OAS’s reorganization.
On March 12, 2015, the United States Court of Appeals for the Eleventh Circuit affirmed the authority of a bankruptcy court to issue non-consensual, non-debtor releases in connection with the confirmation of a plan of reorganization.1 With this decision, the Eleventh Circuit joined the majority view that such releases are permissible under certain circumstances.
Background
An opinion from the Second Circuit Court of Appeals in In re Motors Liquidation Company, relying on the Delaware Supreme Court’s answer to a certified question highlight the need to focus on the details w
On January 21, 2015, the United States Court of Appeals for the Second Circuit entered an opinion holding that an authorized UCC-3 termination statement is effective, for purposes of Delaware’s Uniform Commercial Code (the “UCC”), to terminate the perfection of the underlying security interest even though the secured lender never intended to extinguish the security interest and mistakenly authorized the filing.1
Background
The Portland Press Herald reports that the bankruptcy trustee for Great Northern Paper has said there is sufficient evidence to pursue claims against the Company’s owners, officers and directors for breach of their fiduciary duties and breach of the duty of loyalty arising from the structuring and execution of a Maine new markets tax credit transaction.
For the past 15 years, trust preferred securities (TruPS) have constituted a significant percentage of the capital of many financial institutions, mostly bank holding companies.Their ubiquity, both as a source of capital and as a common investment for banks, made them a quiet constant for many financial institutions. Even in the chaos of the Great Recession, standard TruPS terms allowed for the deferral of interest payments for up to five years, easing institutions’ cash-flow burdens during those volatile times.
On October 17, 2014, the Delaware Supreme Court entered an opinion holding that a UCC-3 termination statement that is authorized by the secured party is effective to terminate the original UCC filing even though the secured party did not actually intend to extinguish the underlying security interest.1 Because the court determined that the relevant section of Delaware’s Uniform Commercial Code (the “UCC”) is unambiguous and
On October 16, 2014, the United States Court of Appeals for the Fifth Circuit entered an order requiring a real estate lender, First National Bank (the “Lender”), to refund certain mortgage payments it received from Protective Health Management (the “Debtor”), an affiliate of its borrower.1 Because the mortgage payments constituted actual fraudulent transfers, the Fifth Circuit held that the Lender could retain the payments only to the extent of the value of the Debtor’s continued use of the property.2&