On April 4, 2020, the State of New York will join ranks with the vast majority of other states implementing a version of the Uniform Voidable Transactions Act (the “UVTA”). Only Maryland continues to apply the Uniform Fraudulent Conveyance Act (the “UFCA”), a law with its origins as early as 1918. A handful of other states that did not adopt the UFCA instead retain their varied, state-specific transfer laws. The uniform legislation was first promulgated in 1984 as an amendment to the UFCA, referred to as the Uniform Fraudulent Transfer Act (“UFTA”).

A new wave of bankruptcy filings for leveraged oil and gas companies has begun and this time it may involve more prepacks and less optimism. Beginning in late 2015 and continuing through 2017, downtown Houston was filled with bankruptcy lawyers. Highly leveraged exploration and production (or E&P) companies had become crippled by falling oil prices and the resulting impact on the value of their producing and non-producing reserves in their borrowing bases.

Going forward, lenders must take precautionary measures to protect themselves. Anticipating the risk of a U.S. bankruptcy case is a crucial first step.

In complex long-term charters for vessels or finance leases in respect of vessels under the U.S. Uniform Commercial Code (“UCC”) and its Article 2A (governing commercial matters relating to finance leases) and under other similar law, a charterer’s or lessor’s damages under a charter or lease— both generally upon a payment default or in the event of a casualty—are often liquidated in stipulated loss value (“SLV”) provisions. These provisions ensure that the lessor/charterer gets the benefit of its bargain.

The Insolvency Working Group of the United Nations Commission on International Trade Law (“UNCITRAL”⁾¹ has been busy this past year, working on three new model laws and developing work on at least two possible future projects.2 The Insolvency Working Group is responsible for drafting the Model Law on Cross-Border Insolvency (the “CBI Model Law”) in 1997, which has since been adopted in 46 countries and is under consideration in several others. In 2005, the United States adopted the CBI Model Law as Chapter 15 of the United States Bankruptcy Code. 

The Supreme Court recently limited the ability of debtors to use contract rejection in bankruptcy to shed unwanted trademark licensees. But the Court acknowledged that the result could change if the trademark licensing agreement had different termination rights. Going forward, parties entering into trademark licensing agreements will need to consider this decision carefully as they negotiate termination rights in the event of a bankruptcy by the licensor.

The court noted that the DOJ might prosecute cannabis-related businesses under the CSA, notwithstanding plan confirmation. Thus, Garvin may have foreclosed any future DOJ CSA-based noneconomic objections to cannabis reorganizations.

With the May 1 order, the Commission reaffirms its view that it has concurrent jurisdiction over debtors’ efforts to reject their FERC-jurisdictional contracts in bankruptcy. Further developments in judicial proceedings in the Sixth and Ninth Circuits are expected.

On May 1, 2019, the Federal Energy Regulatory Commission denied Pacific Gas and Electric Co.’s requests for rehearing of two commission orders asserting concurrent jurisdiction with bankruptcy courts over the disposition of wholesale power contracts PG&E seeks to reject through bankruptcy.[1]

Contrary to the Bankruptcy Court’s ruling, the District Court concluded that California's liquidated damages statute does not apply to the default interest rate provision.