Welcome back to Distressed Debt Legal Insights, Ropes & Gray’s source of timely insights for professionals navigating the complex world of liability management and special situations finance. In this issue we will provide a summary of certain aspects of the noteholder litigation in Wesco that culminated in the recent district court decision approving the 2022 uptier transaction and reversing the bankruptcy court’s decision.
The Original Transaction
In this issue, we spotlight the unfolding litigation between the UCC and Oaktree in TPI Composites’ ongoing bankruptcy, which appears to be headed for a settlement. This case is unusual in that the uptier transformed former equity holders into senior creditors rather than elevating existing lenders.
The Unsecured Creditors Committee Challenge
Welcome back to Distressed Debt Legal Insights, Ropes & Gray’s new source of timely insights for professionals navigating the complex world of liability management. In this edition, we’re looking at how Anthology resolved an objection to its proposed non-pro rata DIP rollup.
Background
Anthology filed for Chapter 11 on Sept. 29 in the Southern District of Texas with a restructuring support agreement signed by 87% of first out lenders and 68% of second out lenders.
On July 31, 2024, the Supreme Court of Canada released its decision in Poonian v. British Columbia (Securities Commission), on whether financial sanctions imposed by securities regulators are dischargeable through bankruptcy. The decision resolves a conflict between Alberta and B.C. jurisprudence and will have a significant impact on the treatment of all administrative orders in bankruptcy proceedings.
The facts
Section 192 of the Canada Business Corporations Act (CBCA) provides a flexible tool that allows corporations to achieve important change and undertake various corporate transactions, subject to court approval and oversight. This article aims to provide an update on the Québec courts’ acceptance of virtual securityholder meetings and approach to the solvency requirement.
Overview of the arrangement process
Employee terminations and downsizing are features of most restructurings. While employees can typically assert a claim in the insolvency process, parallel claims and complaints with labour relations regulators and tribunals are relatively common. In a recent judgment, the Superior Court of Québec clarified that all employee claims can be extinguished through a plan of arrangement under the Companies’ Creditors Arrangement Act (CCAA), including those filed before regulators and tribunals.
Since we last discussed the then-novel restructuring mechanism known as the reverse vesting order (RVO) in 2020, insolvency professionals have been seeking, and courts have been approving, this facilitative remedy with greater frequency.
Le 10 novembre 2022, la Cour suprême du Canada (CSC) a rendu sa décision très attendue dans l’affaire Peace River Hydro Partners c. Petrowest Corp. (affaire Petrowest).
L’arbitrage est un mode consensuel de résolution des différends qui permet aux parties de personnaliser leur processus et même de choisir leur propre décideur. L’insolvabilité est le scénario diamétralement opposé, dans lequel les différends concernant le débiteur sont involontairement regroupés devant un seul tribunal d’insolvabilité.
Arbitration is a consensual method of dispute resolution in which the parties can customize their process and even select their own decision-maker. Insolvency is the diametrically opposite scenario, where disputes involving the debtor are involuntarily consolidated before a single insolvency court.