On 27 May 2015, the bill for the Act implementing the European framework for the recovery and resolution of banks and investment firms (the "Implementation Act") and the explanatory memorandum thereto (the "Explanatory Memorandum") were published. The purpose of the Implementation Act is to implement the Bank Recovery and Resolution Directive ("BRRD") and to facilitate the application of the Single Resolution Mechanism Regulation ("SRMR").
On April 8, 2015, we distributed a Corporate Alert outlining two important decisions of the US District Court for the Southern District of New York and their potential effects on future debt exchange offers.1 Since then, the Education Management court has issued a final ruling on the following question, as stated by the court in its most recent decision: “does a debt restructuring violate Section 316(b) of the Trust Indenture Act (the Act) when it does not modify any indenture term explicitly governing the right to receive interest or principal on
Germany’s Frankfurt District Court recently dealt with the question of whether a debtor’s lawyers’ fees arising from restructuring advice prior to insolvency could be challenged and claimed back in insolvency. The court held in the first instance (07.05.2015, Az. 2-32 O 102/13) that the lawyers of an insolvent German company in the solar industry had to repay €4.5 million after the out-of-court restructuring failed.
The Delaware Court of Chancery recently issued an opinion in Quadrant Structured Products Company1that addresses creditors’ rights to bring derivative lawsuits against directors and officers of a corporation. The Court held that Delaware law does not impose a continuous insolvency requirement and that the “traditional balance sheet test” is the appropriate test for determining solvency. The opinion also provides a roadmap on the current landscape under Delaware law for analyzing breach of fiduciary duty claims.
The senior secured note holders recently lost their appeal of the bankruptcy court's decision confirming Momentive's chapter 11 plan.1
On 20 May 2015, after a three-year legislative process, a recast version of the European Insolvency Regulation (EIR) was adopted. For the most part, it will be applicable in approximately two years' time. The most important changes likely to affect the European restructuring landscape are a broader scope of application and new rules on COMI. The recast regulation also introduces a framework for group insolvency proceedings.
Originally published in ABF Journal on May 20, 2015
Determining secured lender cramdown interest rates in Chapter 11 cases has been widely debated, and recent court rulings have proven to be inconclusive. Kaye Scholer Attorneys Madlyn Gleich Primoff and Holly Martin discuss the controversial issue, highlighting the ABI Commission’s recent recommendations that endorse a more favorable approach for secured lenders.
Why Lawyers Need to Pay More Attention to the Distinctions Between Veil-Piercing and Alter-Ego Theories
Two recent decisions of the US District Court for the Southern District of New York may complicate future debt exchange offers. The cases address the validity, under the Trust Indenture Act of 1939, as amended (the Act), of indenture amendments that delete substantive covenant protections in the context of out-of-court debt restructurings. Such amendments are a common feature of debt exchange and cash tender offers and are often essential to achieve a restructuring outside of bankruptcy court.
With the near-historic drop in oil prices, distressed investors are evaluating a myriad of investment opportunities in the oil industry and related fields. One particular area of focus when analyzing these energy-related opportunities are the master limited partnerships that many energy companies utilize in their corporate structure.
Drop in Oil Prices