In Momentive Performance Materials, the Second Circuit declined to dismiss as equitably moot the appeals of certain noteholders.
The scope of the Bankruptcy Code’s safe harbor for certain financial contracts has been tested again, this time in the United States Bankruptcy Court for the Western District of Louisiana. The question this time was whether an ipso facto provision continues to be safe harbored if enforcement of that provision is conditioned on other factors – in this case, the debtor’s failure to perform under the contract.
Earlier this month, Judge Sontchi dismissed an intercreditor adversary complaint filed in 2014 by the Energy Future Holdings (“EFH”) first-lien trustee against the second-lien noteholders. At issue in this decision, Delaware Trust Co. v. Computershare Trust Co.
The availability of a debtor’s insurance policy can have a significant impact on its chapter 11 case. Indeed, in certain chapter 11 cases insurance proceeds may be a creditor’s only opportunity to potentially receive a recovery on meritorious claims. Relying on insurance proceeds, however, is not infallible. An insurance policy may, for example, contain a coverage exclusion that would preclude a claim. For instance, nearly all directors’ and officers’ liability insurance policies traditionally include an insured v.
When is a claim contingent? When is a claim subject to a bona fide dispute and who has the burden of proof? When is a claim against a person? When is a claim too small to count? When is an alleged debtor generally not paying his debts as they come due? Are we there yet?
Claims estimation can be an important tool for a chapter 11 debtor, particularly to pave the way for proposing a chapter 11 plan. How a bankruptcy court estimates wrongful death and personal injury tort claims (which have a jury trial right) is an interesting issue that was recently discussed by the Bankruptcy Court for the Central District of California in In re North American Health Care, Inc.
Bond restructurings Implementation mechanisms: schemes vs. exchange offers December 2015 ■ a principal haircut; ■ extended maturity; and / or ■ a change in coupon (rate and/or whether the coupon is cash-pay or PIK). Exchange offers are based entirely on voluntary participation. They can only succeed if a critical mass of bondholders agrees to participate. A “carrot and stick” approach is used to incentivise participation and penalise holdouts. For background on the use of schemes of arrangement as restructuring tools, see here.