An insight into the key issues and challenges facing global infrastructure projects, and a look at possible solutions and mitigations.

In brief

The Masri litigation has yet again troubled the English Court on the principle of comity and provided the Court of Appeal with the opportunity to say just how important it is in international debt enforcement.

The background on Masri

Clients active in commodities markets (e.g. large consumers of copper and other metals) may be affected by the collapse of MF Global which was recently placed into Chapter 11 process in the US and into Administration in the UK. MFGlobal was an active clearing agent on numerous metal exchanges including the London Metal Exchange.

In This Issue:

U.S. Supreme Court: Creditors May Immediately Appeal Denials of Automatic-Stay Relief

The sudden fall of the oil market is already wreaking havoc on companies, and recent bankruptcy filings may be just the beginning.

A new chapter has begun in the ongoing saga to clarify the role of the Federal Energy Regulatory Commission (FERC) in bankruptcy proceedings involving FERC-jurisdictional contracts. In a March 30 order, the FERC identified how it will exercise its jurisdiction under the Federal Power Act (FPA) concurrently with the Bankruptcy Court with regard to the proposed rejection of FERC-jurisdictional contracts in bankruptcy.[1]

2019 was a momentous year for the energy sector: The U.S. became a net oil exporter for the first time in recorded history and at the same time energy dropped to less than five percent of the S&P 500 Index. With the precipitous drop in commodity prices and macroeconomic volatility triggered by the oil price war and COVID-19 pandemic, 2020 presents challenges and change for the global and domestic energy sectors. We thank all of our valued clients and look forward to working with you to anticipate and solve problems and capitalize on industry and global trends.

On Friday, March 27, 2020, the U.S. House of Representatives voted to approve the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) submitted by the Senate and President Trump just signed the bill. The bill provides for $2.2 trillion in emergency aid to ease the financial impact of the COVID-19 crisis.

The question is no longer whether the volatility created by the COVID-19 pandemic will deepen the difficulties businesses and other institutions face in the coming months, but by how much and in what ways. In the past few weeks, we have offered client mailings and webinars on COVID-19-related topics, and we will work to keep you informed of important developments as these issues evolve. Included below are updates to our recent commentary, with answers to questions we have been receiving.

Corporate

Impact of COVID-19 on M&A

Even before coronavirus concerns, the slump in oil demand placed considerable financial stress on oil exploration and production companies. With Saudi Arabia and Russia unable to reach an agreement on crude production, oil markets plunged further. That plunge led to a corresponding decline in high-yield bond prices issued by many U.S. producers. Although many of these bonds do not mature until 2021 or later, U.S. producers still face considerable stress.