Windstream Holdings, Inc.’s (“Windstream”) chapter 11 bankruptcy filing following its contentious litigation with Aurelius Capital Management LP (“Aurelius”) has rekindled market participants’ concerns over the effects of so-called “net short debt activism” – the efforts of creditors who, despite holding a borrower’s debt, seem motivated to push the borrower into distress over covenant or other defaults.
On 6 June 2018, the Commercial Court handed down its judgment in Nori Holdings Ltd v Bank Otkritie Financial Corp [2018] EWHC 1343 (Comm), and provided helpful guidance on three important issues:
1. The Court clarified that West Tankers1 remains good law in that parties will not be granted anti-suit injunctions by the English Court to restrain proceedings commenced in other Member States in breach of an agreement to arbitrate, notwithstanding the contrary opinion expressed by Attorney General Wathelet in Gazprom (C-536/13).
On April 17, NewSat Ltd. (NewSat) and various affiliates, including Jabiru Satellite Holdings Pty Ltd., were placed in administration in Australia by the trustee for its lenders, Citicorp International, and related petitions were filed in the U.S.
On March 25, LightSquared Inc. obtained U.S. Bankruptcy Court approval to exit Chapter 11 protection pursuant to a restructuring plan that will pay its largest creditor, Charles Ergen, roughly $1.5b in cash to account for full repayment, with interest, of Ergen’s holdings of LightSquared debt.
The Supreme Court may revisit two of the many questions left open by its much-discussed decision in Stern v. Marshall, 131 S. Ct. 2594 (2011), an opinion famous not only for its subject – the estate of the late actress and model Anna Nicole Smith – but also for redefining the allocation of judicial authority between an Article III federal district court and a bankruptcy court. Appellants have filed a petition for a writ of certiorari seeking review of the Ninth Circuit’s decision in Executive Benefits Insurance Agency v.
A recent decision by the United States Bankruptcy Court for the Southern District of New York1 found that a UCC-3 termination statement filed on behalf of a secured creditor was not effective because it lacked the proper authorization.
The Bankruptcy Court for the Southern District of New York held recently that § 550 of the Bankruptcy Code does not limit the potential recovery on fraudulent transfer claims to the amount of unpaid creditor claims against a debtor’s estate. According to the Court, the language in § 550(a) that states that a plaintiff in an avoidance action can recover the property transferred or the value of the property “for the benefit of the estate” provides a “floor” rather than a “ceiling” on recovery.