The New York Court of Appeals’ recent 4-3 opinion in CNH Diversified Opportunities Master Account, L.P. v. Cleveland Unlimited, Inc., 2020 WL 6163305 (NY Oct. 22, 2020), could provide minority noteholders with additional negotiating leverage in the context of attempted out-of-court restructurings. However, the scope of this decision’s impact, and whether it conflicts with the U.S. Court of Appeals for the Second Circuit’s prior holding in Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Fin. Corp., 846 F.3d 1 (2d Cir.
The oil and gas industry in the United States is highly dependent upon an intricate set of agreements that allow oil and gas to be gathered from privately owned land. Historically, the dedication language in oil and gas gathering agreements—through which the rights to the oil or gas in specified land are dedicated—was viewed as being a covenant that ran with the land. That view was put to the test during the wave of oil and gas exploration company bankruptcies that began in 2014.
The COVID-19 pandemic has created financial distress across many sectors of the economy. As a result, there is a good chance that your business has, or soon will, be forced to deal with a customer bankruptcy. When your customer files for bankruptcy, all is not necessarily lost. The strategic actions you take, in consultation with an experienced attorney, before and during a bankruptcy can help improve your odds of recovery.
EIGHTH CIRCUIT BANKRUPTCY MONITOR
A recent decision from the United States Bankruptcy Court for the Central District of Illinois (“Court”) is a stark reminder of the importance of paying attention to notices received from bankruptcy cases and the need for creditors to consider retaining counsel to protect their interests in such cases. In In re Kevin R. Gaffney, after Kevin Gaffney (“Debtor”) filed a petition for relief under chapter 7 of the United States Bankruptcy Code, 11 U.S.C.
On Oct. 28, 2020, the U.S. Bankruptcy Court for the Southern District of Texas delivered a key ruling affecting: (1) purchase and sale agreements for produced gas and severed minerals; and (2) agreements with “exclusive remedy” provisions and liquidated damage clauses. See Mem. Op., In re: Chesapeake Energy Corp., et al., Cause No. 20-33233 (Bankr. S.D. Tex. Oct. 28, 2020).
The Bankruptcy Code enables a trustee to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C. §§ 544, 547, 548. These avoidance powers are subject to certain limitations, including a safe harbor in section 546(e) exempting certain transfers. Among other things, section 546(e) bars avoidance of a “settlement payment . . . made by or to (or for the benefit of) . . . a financial institution [or] a transfer made by or to (or for the benefit of) a . . . financial institution . . .
In ordinary times, a supplier of goods looks to customer-specific underwriting considerations to weigh the benefit of extending credit to a new or existing customer against the risk that the customer will fail to pay for the goods or services supplied. These are not ordina