This newsletter refers to Restructuring, Insolvency and Bankruptcy news of November 2014.
H.A.M.A.C: adoption de la première sauvegarde accélérée
Le 19 septembre 2014, le tribunal de commerce de Nanterre a ouvert la toute première procédure de sauvegarde accélérée au bénéfice de H.A.M.A.C, la société holding du groupe Alma Consulting, auquel appartient le cabinet de conseil Alma Consulting Group.
Almost every significant bankruptcy case eventually involves preference demands and litigation. Around this abundance of litigation developed a significant body of jurisprudence, to which Judge Sean Lane of the Southern District of New York Bankruptcy Court recently added in clarifying the ordinary course of business preference defense.
In recent years, second lien financings have increased in popularity. Senior creditors rely on intercreditor agreements to protect their interests by limiting the rights that junior lien holders would otherwise enjoy as secured creditors through either lien subordination, payment subordination, or both. Lien subordination requires the turnover to first lien creditors of proceeds of shared collateral until the first lien holders are paid in full.
Case Summary
This case presents a common scenario and dynamic that a party involved with a distressed bank holding company may have seen in the last several years.
Many indentures contain “make-whole provisions,” which protect a noteholder’s right to receive bargained-for interest payments by requiring compensation for lost interest when accrued principal and interest are paid early. Make-whole provisions permit a borrower to redeem or repay notes before maturity, but require the borrower to make a payment that is calculated to compensate noteholders for a loss of expected interest payments.
In an opinion filed on July 3, 2014, in the case of In re Lower Bucks Hospital, et al., Case No. 10-10239 (ELF), the United States Court of Appeals for the Third Circuit (Third Circuit) affirmed a decision of the United States Bankruptcy Court for the Eastern District of Pennsylvania (Bankruptcy Court), which denied approval of third-party releases benefitting The Bank of New York Mellon Trust Company, N.A., in its capacity as indenture trustee (BNYM, or the Trustee).
Schroder Exempt Property Unit Trust and another v. Birmingham City Council [2014] EWHC 2207
Summary
A landlord is liable for business rates where a tenant's lease is disclaimed, even if the landlord does not take possession of the property following a disclaimer.
Background
On May 28, 2014, the District Court for the Southern District of New York affirmed an order from the bankruptcy court in Dishi & Sons v. Bay Condos LLC, et al.1, approving a sale of the Debtor’s assets, but found that the Debtor’s commercial tenant was entitled to remain in possession of the premises for the remainder of the lease at the specified rent.
The Restructuring, Insolvency and Bankruptcy Group considers the English law position.
Wrongful Trading
The Restructuring, Insolvency and Bankruptcy Group considers the legal, commercial and practical issues.
Do a deal quickly!
Often it is in the interests of both buyer and seller to negotiate and complete a deal as soon as possible to preserve value in the business before goodwill is tainted with any stigma of insolvency or key employees, suppliers or customers leave the business.
Buy the business not the shares