Recent developments
On March 9, 2016, Bankruptcy Judge Shelley Chapman of the Southern District of New York issued her decision on the Debtor’s motion to reject certain contracts in Sabine Oil & Gas Corporation’s Chapter 11 case.[i] The decision, which allowed Sabine to reject “gathering agreements”
The Queensland Court of Appeal has upheld an appeal by the liquidators of Linc Energy Limited (In Liquidation) (“Linc”) and given full effect to their disclaimer of contaminated mining property and onerous obligations the subject of an environmental protection order (“EPO”) issued by the Queensland Department of Environment and Science (“DES”).[1]
Following California-based solar manufacturer Solyndra’s announcement August 31 that it intends to file for bankruptcy, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight Subcommittee Chairman Cliff Stearns (R-TX) requested more documents from the White House regarding the Department of Energy’s $535 million loan guarantee to the company, the first to be awarded in September 2009. The bankruptcy is likely to intensify congressional criticism of the agency’s loan guarantee program and other renewable energy subsidies.
A recent bankruptcy court decision from the influential Southern District of New York permitted a debtor to reject executory contracts with midstream gathers as an exercise of sound business judgment. In In re Sabine Oil & Gas Corporation, the court issued an advisory ruling in which it determined that certain provisions of the rejected contracts were not covenants that ran with the land, and thus could be rejected thereby relieving the debtor of a financial hardship.
The Commonwealth of Puerto Rico and the Puerto Rico Electric Power Authority (PREPA) yesterday filed separate motions to dismiss the federal court complaint filed last month by some PREPA bondholders seeking to invalidate the recently-enacted Puerto Rico Public Corporation Debt Enforcement and Recovery Act.&n
On Saturday, June 28, Puerto Rico’s Governor Padilla signed into effect Puerto Rico’s new bankruptcy law for certain revenue bond issuers. Within 24 hours of the statute’s enactment, two mutual fund complexes owning approximately $1.7 billion in bonds of the Puerto Rico Electric Power Authority (PREPA) filed a complaint in the federal district court for Puerto Rico, seeking a declaratory judgment invalidating the fledgling legislation.
On March 20, Suntech, a Chinese solar manufacturing company, declared bankruptcy. Questions have arisen on how the country’s solar industry will now cope with overcapacity issues which stem from a decline in demand from Europe. The declaration comes a week after the company announced it had defaulted on $541 million of bonds.
Electric vehicle battery manufacturer A123, which received a $249 million stimulus grant from the Department of Energy, filed for Chapter 11 bankruptcy protection October 15 in the U.S. Bankruptcy Court for the District of Delaware to facilitate an agreement in which Johnson Controls will purchase its automotive business assets for $125 million. The company has drawn down roughly $131 million of its grant, and has faced problems with batteries supplied to Fisker as well as low demand for electric vehicles.
Officials from Abound Solar Manufacturing told the House Oversight and Government Reform Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending July 18 that inexpensive solar panel imports from China led the manufacturer to file for bankruptcy July 2 after receiving a Department of Energy loan guarantee. The company had drawn down $70 million of the $400 million loan guarantee.