A recent decision by the US District Court for the Southern District of New York regarding the terms of an engagement letter demonstrates the need to clearly articulate the intended purpose and scope of an engagement. As the case described below demonstrates, if there is any ambiguity with regard to whether or not a fee must be paid and/or when an engagement is terminated, the resolution of such ambiguity may depend upon the description of the engagement’s purpose.
In a recent opinion arising from the Chapter 11 proceedings of Arcapita Bank, Judge Alvin Hellerstein of the US District Court for the Southern District of New York affirmed a bankruptcy court decision denying safe-harbor protection to Shari’a-compliant Murabaha investment agreements.1 Specifically, the district court held that the Murabaha agreemen
In a recent opinion from the Delaware Bankruptcy Court in the Dura Automotive Systems bankruptcy case,[1] Judge Karen Owens held that executory contracts cannot be impliedly assumed through course of conduct by the parties, under binding Third Circuit precedent, notwithstanding that a minority of courts outside of the Third Circuit have allowed it
In a January 2021 decision issued in the re-opened United Refining Company1 bankruptcy case, Judge Lopez of the Southern District of Texas Bankruptcy Court addressed when a tort claim is deemed to arise for purposes
In a pair of private exchange offers consummated in May 2020, airport operating companies owned by Corporacin Amrica Airports S.A. (NYSE: CAAP) in Argentina and Uruguay were able to restructure their existing debt securities in order to withstand the substantial revenue declines associated with the drop-off in air travel as a result of the coronavirus pandemic ("COVID-19").
Last October we highlighted an important ruling issued in September 2019 by the Seventh Circuit in the bankruptcy proceeding of In re I80 Equipment, LLC.
Both the First Energy Solutions and PG&E bankruptcies have seen proceedings regarding power purchase and similar agreements (PPAs) that raise this question.
Background
Contracts often contain provisions that enable a party to terminate or modify the contract based on the other party's bankruptcy filing, insolvency or deteriorating financial condition. In general, the Bankruptcy Code renders these types of provisions (sometimes referred to as "ipso facto" clauses) ineffective. Specifically, under section 365(e)(1) of the Bankruptcy Code (emphasis added):
U.S. Bank N.A. v. Village at Lakeridge, LLC, No. 15-1509
Harris v. Viegelahn, No. 14-400 (previously described in the December 15, 2014, Docket Report)
The US Court of Appeals for the Second Circuit recently certified to the New York Court of Appeals two questions concerning the ability of a judgment creditor to garnish accounts of judgment debtors at non-US subsidiaries of banks that have branches in New York or are otherwise subject to jurisdiction in New York.