A court in New York has allowed offshore debtors to take control of an investment account in the U.S. over the objection of a shareholder. At stake was the court’s discretion to permit chapter 15 debtors to access the funds and to transfer them outside the U.S. The shareholder asserted that its interests weren’t fully protected, but the court ruled that on balance the debtors’ need for the money outweighed the shareholder’s concerns.

On January 25, 2019, the US Federal Energy Regulatory Commission (“FERC” or “Commission”) issued an order clarifying its position with regard to bankruptcy filings that seek to reject Commission-jurisdictional wholesale power purchase agreements. In response to a petition for a declaratory order and complaint filed by NextEra Energy, Inc. and NextEra Energy Partners, L.P.

Seyfarth Synopsis: The Child Victim Act is now law and is likely to have a significant impact on many of New York’s institutions. Educational, religious or other civic organizations that care for children.

What is the Child Victim Act?

In a recent decision that will be of interest to capital and structured finance market participants,1 a bankruptcy court in the Southern District of New York found that nonrecourse noteholders of a structured finance vehicle were not eligible petitioners under § 303(b) of the Bankruptcy Code and therefore could not commence an involuntary bankruptcy case.

Equitable mootness is a judicially created doctrine often applied in appeals from orders of bankruptcy courts confirming chapter 11 plans of reorganization. In instances where granting relief on appeal would result in overturning the confirmation order and therefore unravelling a substantially consummated chapter 11 plan, appellate courts have, in certain circumstances, abstained from deciding appeals in reliance on equitable mootness.

The Bottom Line

In In re ENNIA Caribe Holding N.V., 18-12908 (Bankr. S.D.N.Y. Dec. 20, 2018), a bankruptcy court in the Southern District of New York recognized a foreign insurance company’s rehabilitation proceeding in Curaçao as a “foreign main proceeding,” pursuant to Chapter 15 of the Bankruptcy Code, over objections from the insurance company’s nondebtor parent company. In doing so, the court examined, among other things, what is required for a “collective proceeding” in a foreign insolvency.

What Happened

Democrats now control both houses of the New York Legislature as well as the Governor’s office. A host of legislation may be in the offing. One expected piece of legislation will be passage of the Child Victim Act (CVA).

Background

In a recent cross-border insolvency case, Judge Glenn of the United States Bankruptcy Court for the Southern District of New York recognized an insurance company rehabilitation proceeding in Curaçao as a “foreign main proceeding” under Chapter 15 of the Bankruptcy Code.[1]

A recent chapter 15 decision by Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) suggests that third-party releases susceptible to challenge or rejection in chapter 11 proceedings may be recognized and enforced under chapter 15. This decision provides companies with cross-border connections a path to achieve approval of non-consensual third-party guarantor releases in the U.S.

Background

On November 8, 2018, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) issued a decision dismissing an involuntary chapter 11 case filed against Taberna Preferred Funding IV, Ltd. (“Taberna”), a CDO, by holders of non-recourse notes (the “Petitioning Creditors”).