In two recent decisions,² the United States Bankruptcy Court for the Southern District of New York denied motions by large chapter 11 debtors to approve executive bonus plans designated as key employee incentive plans ("KEIP"), finding that the proposed KEIPs actually were disguised and impermissible retention or "pay to stay" bonus plans for insiders. These are the first opinions to reject so-called KEIPs following a recent line of cases that have approved KEIPs for insiders.

Parent company guarantees and performance bonds are typically used in the construction and engineering industries to provide a developer with some security in the event that the contractor breaches the building or engineering contract or, in some circumstances, upon the contractor's insolvency.

In the current economic climate, contractor default is, unfortunately, even more prevalent in the construction and engineering industries, and so the issues surrounding parent company guarantees and performance bonds are very much in focus for developers.

Clients who desire to participate in the International Swaps and Derivatives Association, Inc. (“ISDA”) 2008 Lehman Brothers Holdings Inc. (“Lehman”) Credit Default Swap (“CDS”) Settlement Protocol (the “Settlement Protocol”) must do so by Wednesday, October 8, 2008 at 5:00 p.m. (New York time). The period to join the Settlement Protocol opens on Monday, October 6, 2008; accordingly, there is a relatively narrow window for clients to elect to participate.