Massachusetts-based energy technology company Beacon Power Corporation filed for Chapter 11 restructuring in the U.S. Bankruptcy Court for the District of Delaware October 30. The company received a $43 million Department of Energy loan guarantee in August 2010 to build a 20 MW flywheel energy storage facility in Stephentown, NY, and told the court last week that it has a viable business model with revenue generating assets that should enable the company to achieve profitability in the future.

Does the German restructuring clause of Sec. 8c para. 1a CTA (see our Client Alert of 10 July 2009) conform to European Community law? This will be analyzed by the European Commission which has — by circular of 24 February — announced the initiation of a formal examination procedure (Art. 108 para. 2 TFEU, former Art. 88 para. 2 of the EC Treaty). Already before completion of the formal procedure, corporations with unrestricted and restricted tax liability in Germany may face farreaching consequences.

A. The Restructuring Clause of Sec. 8c para. 1a CTA

Must creditors holding claims denominated in a foreign currency against a debtor in a US bankruptcy case bear the risk of a postpetition decline in the value of the dollar? In In re Global Power Equipment Group Inc.,1 the Bankruptcy Court for the District of Delaware says yes, holding that, pursuant to section 502(b) of the Bankruptcy Code, a contested claim denominated in foreign currency must be converted into United States currency as of the petition date instead of a later judgment or breach date.

The Conversion Date Dispute

In National Energy & Gas Transmission, Inc. v. Liberty Electric Power, LLC (In re National Energy & Gas Transmission, Inc.),1 the Fourth Circuit held that, where an unsecured creditor receives payment from a non-debtor guarantor in partial satisfaction of a claim against the debtor, for purposes of the creditor's claim against the debtor, the creditor may not choose to allocate such payment to post-petition interest.

Introduction

On February 10th, electricity operator LSP Energy LP ("LSP") filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  As stated in court filings, LSP owns and operates an electricity plant located in Batesville, Mississippi.  Aside from its gas-fired electric generation facility, LSP's assets consist primarily of 58 acres of land in which it operates its facility.  See Declaration of LSP's President in Support of First Day Motions (the "Declaration" or "Decl.").

On February 1, 2011, AES Thames, LLC ("AES" or "Debtor") filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to the Declaration of AES's President in Support of First Day Motions (the "Declaration"), AES owns and operates a coal-fired power plant in Montville, Connecticut.