Introduction
Over the last few years, the European leveraged finance market has seen rapid growth of senior secured high yield notes (“SSN”) and senior secured covenant-lite term loan B (“TLB”) financings. A common feature of both SSNs and TLBs (together “Senior Secured Debt”) is that their terms typically permit the incurrence of senior unsecured debt by a borrower and its restricted subsidiaries (a “Credit Group”) subject to either satisfaction of a financial ratio or through various permitted debt baskets.
A hornbook principle of U.S. bankruptcy jurisprudence is that valid liens pass through bankruptcy unaffected. This long-standing principle, however, is at odds with section 1141(c) of the Bankruptcy Code, which provides that, under certain circumstances, "the property dealt with by [a chapter 11] plan is free and clear of all claims and interests of creditors," except as otherwise provided in the plan or the order confirming the plan.
Although the Weil Bankruptcy Blog generally focuses on developments in the chapter 11 context, from time to time we cover cases outside of the bankruptcy world that may interest our readers. Among the challenges restructuring professionals frequently face are analyzing bond indentures, identifying parties’ respective rights to determine whether potential transactions are permissible, and invoking their clients’ rights to payment and other protections. As we have seen in the recent decisions in
In Del. Trust Co. v. Energy Future Intermediate Holding Co. LLC (In re Energy Future Holdings Corp.), 527 B.R. 178 (Bankr. D. Del. 2015), the bankruptcy court ruled that, even though a chapter 11 debtor repaid certain bonds prior to maturity, a "make-whole" premium was not payable under the plain terms of the bond indenture because automatic acceleration of the debt triggered by the debtor's chapter 11 filing was not a "voluntary" repayment.
The first step to defending a debtor's objection to proof of claim is knowing one was filed. Debtors are required to provide notice to creditors. The Federal Rules of Bankruptcy Procedure contain numerous rules governing notice, each describing the form, content and time periods for establishing their adequacy. Deviating from these rules could result in the relief requested being denied, despite an otherwise justifiable claim. Conversely, a creditor's untimely recognition and response to a debtor's properly noticed objection may result in harsh consequences, wh
On September 18, 2015, Margaret M. Okamoto (“Plaintiff”) filed a complaint (the “Complaint”) in The United States District Court for the District of Nevada alleging violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (the “FCRA”), against, inter alia, Bank of America, N.A. (“BOA”), Mutual of Omaha Bank (“MOB”), and Experian Information Solutions, Inc. (collectively, “Defendants”). See Okamoto v. Bank of America et al., No. 2:15-cv-01800-GMN-GWF (Sept. 18, 2015).
The retail industry appears to be reaching the crossroads of complete transformation due to a significant shift in consumer sentiment. Those companies that can embrace the change quickly enough will likely survive. Those that cannot may simply become legends. Indeed, we have seen well-known companies such as RadioShack, Brookstone,
“So many years we’ve tried
To keep our love alive
But baby it ain’t over ’til it’s over”
-Lenny Kravitz – “It Ain’t Over ’Til It’s Over”
A. Fees & Costs