In a win for secured creditors, the Ninth Circuit Court of Appeals recently held that a debtor who sought to cure a pre-petition default of its loan through its Chapter 11 plan must pay the default rate of interest set forth in the note. In Pacifica L 51 LLC v. New Investments Inc., the debtor proposed to pay the outstanding amount due under the note at the pre-default interest rate.
Attributable to Amanda Remus, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel:
The United States Bankruptcy Court for the Southern District of New York today approved the SIPA Trustee's request for an allocation of approximately $342 million in recoveries to the BLMIS Customer Fund and has authorized the SIPA Trustee to proceed with the eighth pro rata interim distribution from the Customer Fund to BLMIS customers with allowed claims.
Most of us are familiar with that old saw “location, location, location”. While location might enhance the value of real estate, including the location as part of the collateral description in the UCC financing statement can limit the protections provided to a secured creditor and may provide a strategy for attack by a bankruptcy trustee. First Niagara Bank learned this valuable lesson but only after spending substantial legal fees to protect a security interest where perfection should have been routine.
Section 316(b) of the Trust Indenture Act (the "TIA") states the right of a bondholder to receive payments pursuant to an indenture security cannot be "impaired or affected without the consent of such holder." Historically, issuers and bondholders have not engaged in extensive litigation based on the argument that Section 316(b) provides a broad restriction protecting bondholders' substantive right to actually receive such payments.
Your business real estate may not be safe from a separate, but related, company’s bankruptcy.
American Apparel, the struggling clothing manufacturer and retailer, found itself in chapter 11 this past November after failing to implement its turnaround plan amid a challenging retail environment. Last week, Judge Shannon in the District of Delaware approved a largely consensual sale of American Apparel’s assets to Gildan Activewear. While the hearing transcript is not yet available, several sources are reporting that, when discussing next steps in the case, Judge Shannon indicated that he is not likely to entertain a structured dismissal.
In the recent decision ofIn re: Abeinsa Holding Inc. et al., Del. Bankr. Ct. Dec. 14, 2016), Case No. 1:16-bk-10790, the Honorable Kevin J. Carey confirmed clean energy developer Abeinsa Holding Inc.’s Chapter 11 plan, which is part of the $16.5 billion global restructuring for Spanish parent Abengoa SA.
The United States Bankruptcy Court for the District of Delaware recently issued an opinion that could mean that directors and officers of insolvent entities face liability for damages caused by the failure to timely file for bankruptcy protection.
Indentures governing high yield and investment grade notes typically provide for a make-whole or other premium to be paid if the issuer redeems the underlying notes prior to maturity. The premiums are intended to compensate the investor for the loss of the bargained-for stream of income over a fixed period of time.[1] Generally, though, under New York law, a make-whole or other premium is not payable upon acceleration of notes after an event of default absent specific indenture language to the contrary.