The enforcement of a lender’s claim for a make-whole premium in a chapter 11 case has created significant controversy among legal practitioners and the courts. Notably, the three circuit courts of appeal that have addressed make-whole claims, i.e. the Second, Third and Fifth Circuits, have issued conflicting decisions on the nature of these claims and their allowance under the Bankruptcy Code. In this post we provide a brief summary of make-whole premiums and address the controversy among the circuits.
Cognac Ferrand S.A.S. v. Mystique Brands LLC, No. 20 Civ. 5933 (S.D.N.Y. Jan. 31, 2021) [click for opinion]
In brief
The North America Tax Practice Group presented The Future of IP Planning, the fourth webinar in the series The Importance of Tax in the Response to COVID-19 on 1 May 2020.
United States: Federal Reserve releases details of lending programs in response to COVID-19 pandemic, including Main Street lending program for mid-sized businesses
On 9 April 2020, the Federal Reserve announced that it would be providing up to USD 2.3 trillion in loans to support the US economy in response to the COVID-19 pandemic.
The oil and gas industry in Texas is currently facing a double whammy from the recent oil price shock and COVID-19 related demand reductions. While exploration and production operators in Texas are proactively taking self-help measures to reinforce their financial frameworks — reducing capital spending, operating expenses, overhead and dividends — the outlook remains highly uncertain.
The current COVID-19 market environment presents unique circumstances to companies and investors who may, as a result of the tumultuous markets and the financial and personal effects of COVID-19, have opportunities to acquire distressed businesses at potentially depressed prices. Particularly in this market environment, though, one or more of the following scenarios may apply:
In this week’s TGIF, we consider the dangers of being the last one standing in ‘mothership’ preference claims. In the recent decision of In the matter of Bias Boating Pty Limited (receivers and managers appointed) (in liquidation) [2019] NSWSC 47, Black J ordered costs against a number of defendants to a preliminary question of insolvency even though they did not participate in the hearing of that question.
This week’s TGIF considers Re Legend International Holdings Inc (In liq) [2018] VSC 789, the next chapter in the story of Legend International Holdings Inc, where the Court found a company to be insolvent on the basis of a foreign debt.
Amortisation of assets is the decrease in value of those assets over a period of time. Amortisation of loans is the process of paying off a debt over time through regular payments.
Bankruptcy
An insolvency procedure which relates to a natural person as opposed to a company.
Bond
An interest bearing security issued by governments and companies as an alternative way to raise capital which can be traded on the open market.
Capital Structure
The composition of a company's mixture of debt and equity funding.
Credit Bid
This week’s TGIF considers Legend International Holdings Inc (In Liquidation) v Indian Farmers Fertiliser Cooperative Ltd & Kisan International Trading FZE [2016] VSCA 151 in which it was held that s 581 does not prohibit a winding up order where Chapter 11 proceedings are on foot.
What happened?