Following several weeks of speculation about how pending cash collateral, cash management, and debtor-in-possession financing motions might affect basic principles of structured finance, the bankruptcy court deferred a final ruling on the motions and extended the interim cash collateral order. In so doing, Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York suggested that CMBS lenders organize themselves so that common issues can be identified and resolution expedited.
On June 1, 2009, General Motors Corporation (“GM”) filed for Chapter 11 bankruptcy protection in the Bankruptcy Court of the Southern District of New York (the “Court”). Pursuant to numerous first day motions filed by GM, the Court has entered various orders relating to the administration of this bankruptcy proceeding. Of particular significance to GM’s suppliers are the following:
1. Deadlines Relating to the Assumption of Supplier Contracts.
General Motors and Affiliates File for Chapter 11 Bankruptcy Protection
On May 14, 2009, Judge Allan Gropper of the US Bankruptcy Court, Southern District of New York, approved a US$400 million DIP financing package in the US$27 billion General Growth Properties, Inc. (“GGP”) Chapter 11 case. Judge Gropper’s ruling also included approval of GGP’s proposal to use cash flow generated by shopping centers, structured by GGP as bankruptcy remote, special purpose entities, to fund GGP’s ongoing central operations while in bankruptcy.
As widely expected, GM and all of its domestic subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York on June 1, 2009. Besides General Motors Corporation, the other three associated debtors are: Chevrolet-Saturn of Harlem, Inc., Saturn, LLC and Saturn Distribution Corporation. Please note that GMAC is not included in these bankruptcy filings.
On May 26, Lehman Brothers Holdings Inc. (LBHI) filed a motion requesting the U.S. Bankruptcy Court for the Southern District of New York to establish August 24 as the deadline for filing proofs of claim against LBHI and its affiliates, and to establish a procedure for such filing, including a required form to be completed online relating to derivatives claims, and a new proof of claim form specific to this case.
Pending motions in the Bankruptcy Court for the Southern District of New York in General Growth Properties’ (GGP) bankruptcy case (Case No. 09-11977) are expected to shed new light on how courts may treat real estate special-purpose entities in bankruptcy and may also have implications for the efficacy of bankruptcy-remote SPE structures used in asset-backed securitization transactions.
The United States Bankruptcy Court for the Southern District of New York, overseeing the bankruptcy cases of Lehman Brothers Holdings Inc. and its affiliated debtors (collectively, the “Debtors”), entered an order on July 2, 2009 (the “Bar Date Order”), establishing September 22, 2009, at 5:00 p.m. (Eastern Time) as the deadline for the filing of claims against the Debtors (the “Bar Date”).
Late last night, after presiding over a three-day hearing on the matter last week, U.S. Bankruptcy Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York issued an order authorizing the sale of substantially all of the assets of General Motors Corporation (“Old GM”) under Section 363 of the Bankruptcy Code (“Section 363 Sale”).