Richard Cordray, the first and only Director of the Consumer Financial Protection Bureau, announced today that he will resign from the Bureau by the end of November–presumably in order to explore a run for governor in his home state of Ohio. Cordray, a Democrat, was appointed to serve as the agency’s first Director in a recess appointment by former President Obama in 2012. He was subsequently confirmed by the Senate in July of 2013. Since that time, Cordray has been the face of the young agency as it pursued aggressive policy and enforcement initiatives.

Perhaps this is one of the first articles you’re reading about the debt crisis in Venezuela. It won’t be the last. The situation there is bad and will get worse.

As they say, what one hand giveth, the other hand taketh. In its recent decision in In re MPM Silicones, LLC, the U.S. Court of Appeals for the Second Circuit addressed make-whole premiums and cramdown rates of interest (among other issues not addressed here), issuing rulings that will impact creditors and debtors alike.

A recent decision of the United States Bankruptcy Court for the Southern District of New York provides important guidance on the limits of nonconsensual third-party releases in the Second Circuit.[1] SunEdison, Inc. sought confirmation of a plan for itself and its affiliated debtors.

In October 2017, the 2nd U.S. Circuit Court of Appeals, in In re MPM Silicones (Momentive) LLC, held that a non-consenting class of creditors is entitled to receive post-confirmation interest at a market rate if an efficient market exists to determine such a rate. In reaching its decision, the 2nd Circuit overruled prior decisions by the Bankruptcy Court and the District Court, which had held that the applicable rate of interest should be determined using the formula method adopted by the Supreme Court in Till v. SCS Credit Corp., 541 U.S.

SUMMARY

It is a unique characteristic of debt restructuring under Chapter 11 of the Bankruptcy Code that a majority of a class of creditors can accept a modification of the terms of the debts owed to the class members, as provided in a plan of reorganization, and thereby bind non-accepting class members.[1] The ordinary route to confirming a Chapter 11 plan is to obtain its acceptance by a majority of every impaired class of creditors and equity hold

On September 1, 2017, the Board of Governors of the Federal Reserve System (the Federal Reserve) adopted a rule (the Rule)1 that will require global systemically important U.S. bank holding companies (U.S. GSIBs)2 and most of their subsidiaries to amend a range of derivatives, short-term funding transactions, securities lending transactions and other qualifying financial contracts (QFCs). The required amendments will limit counterparty termination rights related to certain U.S. GSIB resolution and bankruptcy proceedings.

In Short

The Situation: In In re MPM Silicones, L.L.C., secured noteholders argued that replacement notes distributed to them under a cram-down chapter 11 plan should bear market-rate interest rather than the lower formula rate proposed in the plan and that they were entitled to a make-whole premium.

The United States District Court for Nevada recently reversed a bankruptcy court’s decision and held that a title insurance company’s bankruptcy claim was not barred by the doctrine of claim preclusion because, among other reasons, it was not a party to the underlying state court action. SeeCommonwealth Land Title Ins. Co. v. Creditor Grp., 2017 WL 4683968 (D. Nev. Oct. 17, 2017). In the case, two individuals (the “Owners”) formed two companies (the “Companies”) to purchase and develop property.