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Not for You, Second Lien Creditor: Delaware Bankruptcy Court Reaffirms First Lien Intercreditor Right to Carve Out Collateral

The liquidity-fueled lull in restructuring activity provides both an interesting historical echo of the late 1990s and a useful opportunity for market participants to take note of a deceptively interesting opinion in Giuliano ex rel. Consolidated Bedding, Inc. v. L&P Financial Services Co. (In re Consolidated Bedding, Inc.), Case No. 19-50727, 2021 WL 2638594 (Bankr. D. Del. June 25, 2021) (Shannon, J.).

USA, Delaware, Insolvency & Restructuring, Litigation, Ropes & Gray LLP, Bankruptcy
Secured lender's large makewhole claim upheld by Delaware Bankruptcy Court

The United States Bankruptcy Court for the District of Delaware recently upheld a secured lender’s claim for a $23.5 million “makewhole” premium (the “Makewhole Claim”) over the heavily litigated objection raised by the unsecured creditors’ committee in In re School Specialty, Inc., No. 13-10125 (KJC) (Apr. 22, 2013).

USA, Delaware, Banking, Insolvency & Restructuring, Litigation, Ropes & Gray LLP, Debtor, Maturity (finance), United States bankruptcy court
WaMu court allows equity committee to pursue “equitable disallowance” of noteholder claims based on allegations of insider trading

On September 13, 2011, Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware granted standing for an equity committee in In re Washington Mutual, Inc. (“WaMu”) to seek “equitable disallowance” of claims held by noteholders that had traded claims after engaging in negotiations with WaMu over the terms of a global restructuring.

USA, Delaware, Capital Markets, Insolvency & Restructuring, Litigation, White Collar Crime, Ropes & Gray LLP, Confidentiality, Shareholder, Debtor, Security (finance), Fiduciary, Hedge funds, Insider trading, Non-disclosure agreement, Supreme Court of the United States, United States bankruptcy court, US District Court for District of Delaware