A number of recent structurings of investment-grade rated securitizations of oil and gas wells are sparking conversations in the U.S. upstream oil and gas industry about this relatively new, structured finance product. Although structured finance products are not new to the industry, interest in these products has been rekindled as exploration and production (“E&P”) companies seek alternatives to the more traditional reserve-based loans, equity financing, and bond issuances.

On 4 December 2019, the UK Supreme Court issued its decision in MacDonald and another as joint liquidators of Grampian MacLennan's Distribution Services Ltd v. Carnbroe Estates Ltd [2019] UKSC 57, a Scottish case involving insolvency and "gratuitous alienations" (sales at undervalue).

On June 19, 2019, the U.S.

Gurbinder Grewal and Michael Wright in the UK Construction Team explain the knock on effects of insolvencies and the mitigating steps that can be taken. Early warning signs of looming insolvency can be spotted.

Key points

Background

On June 19, 2019, the U.S.

On June 14, 2019, the U.S. Court of Appeals for the Fifth Circuit issued an opinion[i] affirming bankruptcy and district court decisions finding that, under the terms of the confirmed chapter 11 bankruptcy plan, the debtor’s lenders were not entitled to receive over thirty million dollars of post-petition default interest even though the lenders were fully secured.

The Court of Appeal has considered whether interim dividends paid to a shareholder at a time when the company did not have sufficient distributable reserves, making the payments unlawful, could later be reclassified as salary payments.

Facts

The Court of Appeal has given guidance on when the duty of directors to have regard to the interest of creditors arises. This is an important point, as the general statutory duty of a director to promote the success of the company for the benefit of the company's members is expressly subject to the rules on creditors' interests. The court's decision also considers whether a dividend payment can be challenged as a transaction at an undervalue under section 423 of the Insolvency Act 1986.

Facts

On April 23, 2019, Judge Cote of the District Court for the SDNY, issued an opinion in In re Tribune Company Fraudulent Conveyance Litigation,[i] finding that the Tribune Company, which employed Computershare Trust Company (“CTC”) to handle payments made to shareholders as part of its leverage buyout (“LBO”), would be considered a “financial institution” as defined in