No Turnover of the Make-whole Amount in the EFH Bankruptcy

In a pair of decisions in 2015, the United States Bankruptcy Court of the District of Delaware determined that neither the first lien notes trustee nor the second lien notes trustee of Energy Future Intermediate Holdings Corp. (“EFIH”), a subsidiary of Energy Future Holdings (“EFH”), was entitled to receive a make-whole on the repayment of the corresponding indebtedness resulting from the acceleration of that debt in the EFH bankruptcy case.

Filed under:
USA, Delaware, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Collateral (finance), Interest, Debt, Liquidation, Title 11 of the US Code, United States bankruptcy court, Third Circuit, US District Court for District of Delaware, Trustee
Authors:
Jennifer R. Sharret
Location:
USA
Firm:
Kramer Levin Naftalis & Frankel LLP
Third Circuit confirms narrow construction of the doctrine of equitable mootness – burden on appellant and use of the doctrine should be “rare”

The Bottom Line:

Filed under:
USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Class action, Legal burden of proof, Third Circuit
Authors:
Daniel M. Eggermann
Location:
USA
Firm:
Kramer Levin Naftalis & Frankel LLP
Court upholds “new value” preference defense despite post-petition payment of claim

The Bottom Line:

Filed under:
USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Debtor, United States bankruptcy court, Third Circuit
Authors:
Matthew Ziegler
Location:
USA
Firm:
Kramer Levin Naftalis & Frankel LLP
Third Circuit’s withdrawal decision in Marcal Paper – nothing to sneeze at

The Bottom Line:

Filed under:
USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Employee Retirement Income Security Act 1974 (USA), Debtor, Unsecured debt, Trade union, Consideration, Liability (financial accounting), Defined benefit pension plan, Title 11 of the US Code, United States bankruptcy court, Third Circuit, Sixth Circuit, Bankruptcy Appellate Panel
Authors:
Rachael Ringer
Location:
USA
Firm:
Kramer Levin Naftalis & Frankel LLP
Southern District of New York rules that non-impairment clauses do not apply in bankruptcy

While many amendments to bond indentures can be made without consent from all bondholders, “non-impairment” clauses provide that the indenture may not be amended or restructured in any way that will affect or impair a bondholder’s right to receive principal and interest when due without unanimous consent.

Filed under:
USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bond (finance), Bankruptcy, Debtor, Interest, Debt, Dissenting opinion, Default (finance), Stay of execution, Second Circuit, United States bankruptcy court, Trustee
Location:
USA
Firm:
Kramer Levin Naftalis & Frankel LLP