All items from Bankruptcy and Restructuring Law Monitor

A lender’s entitlement to a make-whole premium, that is, a prepayment penalty designed to compensate the lender for the loss of interest payments it would have received had the borrower continued to service the debt through the maturity date of the loan, depends principally on the plain language of the bond indenture or credit agreement.  See, e.g., HSBC Bank USA, N.A. v. Calpine Corp. (In re Calpine Corp.), No. 07 Civ 3088 (GBD), 2010 WL 3835200, at *4 (S.D.N.Y. Sept. 15, 2010) (after reviewing the debt instruments, the district court agreed with the bankruptcy court insofar as it held that the lenders were not entitled to make-whole premiums because the plain language of the debt instruments did not provide for the payment of premiums in the event of payment pursuant to acceleration); In re Solutia, Inc., 379 B.R. 473, 485 n.7 (Bankr. S.D.N.Y. 2007) (where the indenture provided for automatic acceleration upon the filing of a chapter 11 petition but was silent as to whether any make-whole amount would or would not be payable in connection with such an acceleration, the court refused to “read into agreements between sophisticated parties provisions that are not there,” and held that no make-whole amount was due); Premier Entm’t Biloxi, LLC v. U.S. Bank N.A. (In re Premier Entm’t Biloxi LLC), 445 B.R. 582, 625-27 (Bankr. S.D. Miss.



Posted 1 year 32 weeks ago

We apologize, but our New Jersey telecommunication systems remain adversely affected and are currently not functioning.  This includes phone, voicemail and fax communication.  Thus, if you need to contact anyone at our NJ office, please click here for an attachment containing all of our attorneys’ mobile phone numbers
You may also access our attorneys’ phones numbers on our website.
Alternatively, you may also dial 212-752-8000 for our New York main line, where our Client Service Representative will direct your call accordingly.
All of our offices are open and operational.
Again, and most importantly, we truly wish our best to everyone.



Posted 1 year 45 weeks ago

Dear clients, friends and neighbors,

We realize that in this difficult aftermath of the storm, many of our clients, friends and neighbors are dealing with issues where we may be able to present some relief.
We are very fortunate to have power and Internet in our New Jersey, New York, Delaware and Maryland offices.  For anyone who needs it, we would like to offer you the ability to use our conference rooms to charge your devices, check email or other important areas of your life that you are unable to access.
We very much realize that these are tumultuous times.  It is our utmost hope that we may be able to help alleviate some of the pain and trouble experienced by the people and families we care about.  Please do not hesitate to contact Gayle Englert, Director of Human Resources, at genglert@coleschotz.com or 201-320-2766, if you would like to make use of our facilities.  We will do our very best to accommodate everyone we possibly can.
Also, we hope that you may find the below list of important numbers and services to be helpful.



Posted 1 year 45 weeks ago

All of our offices are open, however, we are experiencing problems with telephone communication in New Jersey.  If you need to contact anyone in our New Jersey office via telephone, please dial our New York main line at 212-752-8000. Our Client Service Representative will then direct your call accordingly.  You may also reach our attorneys... Continue Reading



Posted 1 year 45 weeks ago

We are in the process of restoring computer systems which we hope to have completed shortly. In the meantime, your attorney can be reached via cell phone. If you do not have their cell phone number, please call Gayle Englert, Director of Human Resources, at (201) 320-2766.
Thank you for your patience and understanding.



Posted 1 year 46 weeks ago

In an opinion that has wide-ranging implications for the structured finance industry, the Delaware bankruptcy court recently dismissed a mezzanine borrower’s chapter 11 case as a bad faith filing pursuant to section 1112(b) of the Bankruptcy Code.  In re JER/Jameson Mezz Borrower II, LLC, No. 11-13338, 2011 WL 6749058 (Bankr. D. Del. Dec. 22, 2011).  At the core of the motion to dismiss were allegations that the debtor had filed for bankruptcy in bad faith, solely to benefit the lender to a parent entity, and to the detriment of the debtor’s lender.  The opinion stands in contrast to In re General Growth Properties, Inc., 409 B.R. 43 (Bankr. S.D.N.Y. 2009) (“GGP”), and may leave structurally senior lenders breathing a sigh of relief.
Facts and Procedural History



Posted 2 years 34 weeks ago

In an opinion that has wide-ranging implications for the structured finance industry, the Delaware bankruptcy court recently dismissed a mezzanine borrower’s chapter 11 case as a bad faith filing pursuant to section 1112(b) of the Bankruptcy Code.  In re JER/Jameson Mezz Borrower II, LLC, No. 11-13338, 2011 WL 6749058 (Bankr. D. Del. Dec. 22, 2011).  At the core of the motion to dismiss were allegations that the debtor had filed for bankruptcy in bad faith, solely to benefit the lender to a parent entity, and to the detriment of the debtor’s lender.  The opinion stands in contrast to In re General Growth Properties, Inc., 409 B.R. 43 (Bankr. S.D.N.Y. 2009) (“GGP”), and may leave structurally senior lenders breathing a sigh of relief.
Facts and Procedural History



Posted 2 years 34 weeks ago

The Delaware Supreme Court recently held that creditors lack standing to bring a derivative suit on behalf of an insolvent Delaware limited liability company (an “LLC”) under the Delaware Limited Liability Company Act (the “LLC Act”).  CML V, LLC v. Bax, No. 735, 2011 WL 3863132 (Del. Sept. 2, 2011, corrected Sept. 6, 2011).  In an opinion written by Chief Justice Steele, the Delaware Supreme Court affirmed the Court of Chancery’s dismissal of claims brought by a junior secured creditor against the LLC’s present and former officers directly and derivatively for breaching their fiduciary duties.  The Delaware Supreme Court’s holding was based on a plain reading of 6 Del. C. § 18-1002 which requires that a plaintiff be a “member” or an “assignee” of a limited liability company interest to bring a derivative action on behalf of an LLC. 
Facts and Procedural History



Posted 2 years 51 weeks ago

The Delaware Supreme Court recently held that creditors lack standing to bring a derivative suit on behalf of an insolvent Delaware limited liability company (an “LLC”) under the Delaware Limited Liability Company Act (the “LLC Act”).  CML V, LLC v. Bax, No. 735, 2011 WL 3863132 (Del. Sept. 2, 2011, corrected Sept. 6, 2011).  In an opinion written by Chief Justice Steele, the Delaware Supreme Court affirmed the Court of Chancery’s dismissal of claims brought by a junior secured creditor against the LLC’s present and former officers directly and derivatively for breaching their fiduciary duties.  The Delaware Supreme Court’s holding was based on a plain reading of 6 Del. C. § 18-1002 which requires that a plaintiff be a “member” or an “assignee” of a limited liability company interest to bring a derivative action on behalf of an LLC. 
Facts and Procedural History



Posted 2 years 52 weeks ago

The Bankruptcy Court for the District of New Jersey (Kaplan, J.) recently held that hotel revenues (including revenues generated from room occupancy, food and beverage sales, catering, gift shop purchases, spa, and related hotel services) do not constitute “rent” within the meaning of the Third Circuit decision of In re Jason Realty, L.P., 59 F.3d 423 (3d Cir.



Posted 3 years 18 weeks ago