In a blow to the Lehman Chapter 11 estates, the United States Bankruptcy Court for the Southern District of New York held on September 16, 2015 that Intel Corporation’s Loss calculation resulting from a failed transaction under an ISDA Master Agreement was appropriate.1 The decision is significant both because of the dearth of judicial interpretation of the ISDA mechanics regarding the calculation of early termination amounts, and because it affirms the general market understanding that a non-defaulting party has broad discretion in calculating “Loss,” so long as its
Energy Future Holdings (“EFH” or “Debtors”) has cleared all of the preliminary hurdles in its path as it moves towards the confirmation of its plan of reorganization (the “Plan”).
When you start planning to leave your firm for greener pastures, lots of ethics issues can crop up (bad pun). One of the most acute issues is if you get an offer to join a firm that is on the opposite side of a matter you are already handling. That was the situation in a recent bankruptcy case, In re US Bentonite, Inc., and it led the court to order the firm representing a Chapter 11 debtor-in-possession to disgorge several months’ worth of fees.
Professionals retained in a bankruptcy case by a trustee, a chapter 11 debtor-in-possession ("DIP"), or an official committee may be awarded "reasonable compensation" for "actual, necessary services" performed on behalf of their clients under section 330 of the Bankruptcy Code.
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).