All items from Business Finance & Restructuring News - Weil

Speed Read

  1. Classes – turnover agreement was between creditors and not with the company, so neither it nor lock up changed rights being compromised
  2. Even if it had, judge found that rights were not so dissimilar – judge considered at a high level what FMS would suffer on liquidation compared with turnover and found that this would cause all reasonable senior lenders to “unite in a common cause”
  3. New Obligations – although not decided, concern raised by judge about ability of scheme to impose new obligations to indemnify new guarantees, at least directly. New obligation therefore deleted from scheme prior to sanction
  4. Stay provisons – scheme provisions preventing senior lenders taking action overseas deleted prior to sanction. FMS therefore free to commence actions in Germany
  5. Court confirmed jurisdiction over overseas companies and effect of law change to establish sufficient connection
  6. Court of Appeal has granted leave to appeal, to be heard in December.

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Posted 1 day 5 hours ago

Our Third Quarter Review covers the latest and greatest developments in the restructuring world in the past quarter and follows hot on the heels of the Inaugural Review published in September to coincide with the fourth anniversary of the founding of the Weil Bankruptcy Blog.
And what a fascinating few months it’s been: Judge Drain delivered a highly publicized bench ruling on the confirmation of Momentive Performance Materials’ plan of reorganization on August 26, giving us a whole host of interesting issues to analyze on the treatment of senior secured debt. If you haven’t read it already, please enjoy our in-depth series in the Momentous Decision in Momentive Performance Materials section of this Third Quarter Review, where we discuss Judge Drain’s rulings on, among other things, cramdown, make – wholes, and contractual subordination.
We’ve also continued our market leading coverage of Stern and its progeny in our Stern Files. As we await the Supreme Court’s decision in Wellness lntl Network v. Sharif, the circuit courts have been providing convenient summaries of their split, and we’ve duly blogged about them on the Weil Bankruptcy Blog.



Posted 2 days 3 hours ago

You might recognize the last name “Underhill” from the 1980’s movie, Fletch. In the movie, the main character, Irwin “Fletch” Fletcher overhears snobby country club member Mr. Underhill speaking rudely to a waiter. To get revenge, Fletch famously tells the waiter he’s “with the Underhills” and proceeds to charge a Bloody Mary, a steak sandwich and…a steak sandwich to the Underhills’ tab. In the recent case of In re Underhill (no relation to the Fletch Underhills, in case you were wondering), the United States Court of Appeals for the Sixth Circuit decided that it, too, was “with the Underhills” when it reversed two lower court rulings and found (in the Underhills’ favor) that debtors’ tortious interference claim was not properly includable in the debtors’ pre-bankruptcy estate.
Background



Posted 3 days 6 hours ago

“Will you, won’t you, will you, won’t you, won’t you join the dance?” – The Mock Turtle’s Song, Lewis Carroll’s Alice’s Adventures in Wonderland
Vinny Gambini: Are you suuuuure? Mona Lisa Vito: I’m positive. – My Cousin Vinny
By now, readers of the Weil Bankruptcy Blog should be familiar with the myriad issues raised in the wake of Stern v. Marshall and Executive Benefits Insurance Agency v. Arkison. Among these issues is a hot button question regarding whether bankruptcy courts may enter a final judgment in Stern-type claims (i.e., core matters as to which the bankruptcy court otherwise lacks constitutional authority to enter a final judgment), which the Supreme Court will – hopefully – resolve in its upcoming decision in Wellness Int’l Network v. Sharif. In short, though, in the Ninth Circuit, parties may consent to entry of a final order on Stern claims if they have provided their express or implied consent to same.



Posted 4 days 7 hours ago

Weil partners, Debra Dandeneau and Jeffrey Osterman will be participating in the upcoming PLI program, IP Issues in Business Transactions 2015, scheduled for January 12th and 13th at the New York Conference Center.
Where: PLI New York Center, 1177 Avenue of the Americas, (2nd floor), entrance on 45th Street, New York, New York 10036.
For more information about the program and to register, please visit PLI’s website.
 



Posted 4 days 14 hours ago

As previously discussed here and here, section 365(n) of the Bankruptcy Code offers special protection for licensees of intellectual property. When a debtor-licensor rejects an intellectual property license, section 365(n) allows the licensee to elect to retain its rights under the license without binding the licensor to any continuing obligations.



Posted 5 days 5 hours ago

On 23 October 2014, the Bank of England published its strategy for resolving failing financial institutions in an orderly manner. The Bank of England’s new publication outlines the three stages of resolution – stabilisation, restructuring and exit from resolution – and sets out exactly how the Bank would use its “toolkit” of resolution measures in practice.
Andrew Wilkinson, Alex Wood and Kate Stephenson discuss the Bank of England’s approach in an interview with LexisNexis, which outlines the main issues raised in the “approach document”, future developments and important considerations for clients.
Please click here for the interview: “Three-step strategy for resolution of failed institutions”.
To read our other posting go to Weil’s European Restructuring Watch.



Posted 1 week 1 day ago

Those of us old enough to remember the passage of the North American Free Trade Agreement (or NAFTA) recall its promise of free movement of goods, services, persons, and capital between Canada, the United States, and Mexico, and greater economic prosperity in each of these countries. Regardless of whether you think that promise was fulfilled, the free movement of goods, services, people, and capital across those territorial boundaries seems to have been fertile ground for international litigation regarding the enforcement of foreign judgments and the continued development of jurisprudence on international comity. Such is the case in Milbank v. Philips Lighting Electronics North America (In re Elcoteq, Inc.), a recent decision where the Bankruptcy Court for the Northern District of Texas tackled issues of comity and the extraterritorial reach of the automatic stay with regard to a Mexican foreclosure of a U.S. debtor’s assets in the “free trade zone.”
Background



Posted 1 week 2 days ago

“I’m sorry, Dave. I’m afraid I can’t do that.” – HAL 9000, 2001: A Space Odyssey
The automatic stay set forth in section 362 of the Bankruptcy Code, is one of the hallmarks of bankruptcy – if debtors are not afforded a breathing spell within which to organize their affairs, they stand little chance of successfully resolving their affairs, be it through a liquidation or a reorganization. Indeed, the effort to impose order on creditors seeking payment of claims was likely one of the main drivers of the creation of the modern bankruptcy regime. To ensure that the automatic stay is honored, section 362(k)(1) of the Bankruptcy Code provides for recovery of costs by a debtor in the event that a creditor willfully violates the automatic stay. Those damages can include attorneys’ fees and, in some cases, punitive damages. The automatic stay is a force to be reckoned with, and its bar on premature acts to assert prepetition claims is not to be taken lightly.
So what about non-human actors? As the Supreme Court has taught us over the past few years, though, people aren’t just “people.” Can automated systems violate the stay? And if so, can such a violation be “willful?”



Posted 1 week 3 days ago

“There’s no place like home…”
-Dorothy Gale
If a homestead interest in a residence is a separate vested property interest in and of itself, does a forced sale of that home without compensation beyond the division of proceeds guaranteed by the Bankruptcy Code violate the Fifth Amendment? That was the question underlying In re Thaw, a recent Fifth Circuit decision examining the interaction between the Bankruptcy Code, Texas property law, and the Fifth Amendment of the United States Constitution.
We’re not in Kansas anymore…



Posted 1 week 4 days ago