Many companies secured their financing several years ago when the credit market featured advantageous pricing and loose loan covenants. Because these favorable terms would be impossible for borrowers to obtain in today’s lending environment, many viable companies with highly leveraged capital structures are looking for strategies to remove debt and, at the same time, to preserve, or “reinstate,” the favorable financing deals they secured before the markets crashed.
Courts are now being asked to examine transactions which were completed during the recent exuberant period. Despite the fact that the transactions in question may have been market standard at the time, because those transactions are being scrutinized during an unprecedented economic crisis, it appears that a disproportionate amount of finger pointing – and economic loss – is being directed at secured creditors. The result is a seeming erosion of secured creditors’ rights for the benefit of unsecured creditors.
470-Unit Apartment Complex in Pittsburgh, Pennsylvania In re Ventana Hills Associates, Ltd. (Bankr. N.D. Ill.) Case no. 09-41755 In re Ventana Hills Phase II, L.P. (Bankr. N.D. Ill.) Case no. 09-41758
470-Unit Apartment Complex in Pittsburgh, Pennsylvania In re Ventana Hills Associates, Ltd. (Bankr. N.D. Ill.) Case no. 09-41755 In re Ventana Hills Phase II, L.P. (Bankr. N.D. Ill.) Case no. 09-41758
In a recent holding that a creditor may collect, on an unsecured basis, post-petition attorneys’ fees under an otherwise enforceable pre-petition contract, the Second Circuit Court of Appeals followed a similar ruling by the Ninth Circuit earlier this year, adding to a conflict among the circuits on this issue.
CIT Group Inc.
Intercreditor Agreement in ION Media requires Second Lien Lenders “Be Silent” — precludes challenge to validity of liens; deprives junior creditors of standing to object to plan of reorganization.
Yesterday, Treasury released its most recent completed transactions report for the period ending December 10, 2009.
The Commodity Futures Trading Commission is proposing to amend its Bankruptcy Rules to permit the trustee for a bankrupt futures commission merchant to continue to operate the business of the commodity broker in the ordinary course for a limited period of time.
Not necessarily so, according to the recent rulings of Southern District of New York Bankruptcy Judge Allan Gropper in the US$27 billion General Growth Properties Chapter 11 bankruptcy—at least with respect to the issue of substantive consolidation.