All items from Basis Points

Mo’ Money – New PBGC Rules May Free Up Cash for Lenders and Bondholders

Good news for lenders and bondholders out of the Pension Benefit Guaranty Corp. on Tuesday, June 14, 2011. The PBGC has issued final rules providing that it will not guarantee benefits that are earned in the window between when an employer files for bankruptcy and the PBGC takes over a pension plan. The new rules also provide that only benefits that are nonforfeitable (i.e. vested) as of the petition date will be guaranteed. This could free up more cash for lenders and bondholders on the plan effective date.



From Basis Points
Posted 1 year 48 weeks ago

“New York Court of Appeals Upholds Purchase Agreement’s Broad Release in Affirming Dismissal of $900 Million Fraud Claim

On June 7, 2011, the New York Court of Appeals affirmed the dismissal of a $900 million lawsuit brought by former shareholders against America Movil SAB (“Movil”), Latin America’s largest mobile phone carrier, on the grounds that a general release entered into by the parties in 2003 barred Plaintiffs’ claims. Centro Empresarial Cempresa SA et al. v. America Movil SAB de CV et al., — N.E. 2d –, 2011 WL 2183293, slip op. at 1, 14 (June 7, 2011).



From Basis Points
Posted 1 year 48 weeks ago

TOUSA III: The Secured Lenders Take the Lead!

Judge Gold of the United States District Court for the Southern District of Florida entered an Order today granting the motions of the First and Second Lien Lenders (the Lien Lenders) to intervene in the appeal involving the Transeastern Lenders to the 11th Circuit Court of Appeals (the Transeastern Appeal).  In so doing, Judge Gold accepted the proposition that the 11th Circuit’s decision on the issue of reasonably equivalent value (the REV Issue) would bind the Lien Lenders.  And, because Judge Gold had decided the REV Issue in favo



From Basis Points
Posted 2 years 3 weeks ago

A Make Whole with a Hole: In re Trico Marine Services

Make whole premiums sound simple; they are prepayment premiums that are supposed to “make you whole.”  More precisely, make whole premiums are intended to protect noteholders (or other debt holders) from the loss of future fixed coupon interest payments due to the early repayment of debt if market interest rates have declined in the interim.  Make whole provisions typically require the issuer to pay the positive difference (if any) between (i) the amount of principal and interest currently due and (ii) the net present value of the principal and interest payments that would have



From Basis Points
Posted 2 years 3 weeks ago

Canadian Court Cracks the Nut of a Priming DIP; Are Secured Claims Next?

In Canada, as in the US, corporate debtors are permitted with court approval to obtain DIP financing on a super-priority basis. The Order typically provides protections as hard as a nutshell, including that pension claims cannot crack the shell of protection and are subordinated to the new DIP loan. A recent Canadian decision, however, held that certain pension claims could crack the nut wide open and should be paid ahead of a DIP loan. Re Indalex Limited, 2011 ONCA 265 (Apr. 7, 2011).



From Basis Points
Posted 2 years 5 weeks ago

TOUSA II: LENDERS WIN AGAIN!

Last month we reported on the overwhelming victory of the Transeastern Lenders in their appeal of the decision by the United States Bankruptcy Court for the Southern District of Florida ordering them to disgorge almost $500 million in loan repayments, pre- and post-judgment interest and professional fees (“TOUSA I“1).



From Basis Points
Posted 2 years 10 weeks ago

TOUSA Reversed: Victory for the Capital Markets and Rescue Financings

In a 113-page decision issued on February 11 (the “District Court Decision”), the United States District Court for the Southern District of Florida (Gold, J.) delivered a blistering rebuke to the Florida Bankruptcy Court (Olson, J.) when it quashed the portions of the famous / infamous 2009 TOUSA decision (the “Trial Decision”) holding the so-called “Transeastern Lenders” liable for fraudulent transfers in connec



From Basis Points
Posted 2 years 13 weeks ago