The United States Second Circuit has issued its ruling in the Momentive Performance Materials cases resolving three separate appeals by different groups of creditors of Judge Bricetti’s judgment in the United States District Court of the Southern District of New York, which affirmed Judge Drain’s confirmation of Momentive’s plan of reorganization. Significantly, the Second Circuit ruled that the Bankruptcy Court had erred in the process it used to calculate the “cramdown” interest rate applicable to replacement notes received by senior-lien noteholders under the plan. The Second Circuit remanded the cases to the Bankruptcy Court to assess whether an efficient market rate can be ascertained, and, if so, to apply that typically higher rate to the replacement notes. This Bankruptcy Blog piece will cover this aspect of the judgment, while upcoming blog posts will cover the Second Circuit’s rulings affirming the Bankruptcy Court and District Court in finding that the second-lien notes stand in priority to the subordinated notes, and that the senior-lien noteholders are not entitled to a make-whole premium. Our previous posts on these topics can be found here.
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Prashant Rai recently published an article on appellate review of section 363 sales in the April 2017 edition of the Norton Bankruptcy Law Adviser. To access it, please click the link below: https://www.weil.com/~/media/files/pdfs/2017/nbla_april_2017.pdf Posted with permission from Norton Bankruptcy Law Adviser, April 2017 issue. Copyright (c) 2017 Thomson Reuters/West. For […]
Overview In Asarco, LLC v. Noranda Mining, Inc., the Tenth Circuit Court of Appeals held that representations made to the bankruptcy court that the Debtor’s settlement of environmental claims reflected only the Debtor’s share of the cleanup costs did not judicially estop the Debtor from brining a contribution claim against another […]
Background: Professionals’ Fees in Chapter 11 cases Chapter 11 reorganizations are a complex affair. They often require various professionals – attorneys, accountants, investment bankers, appraisers and other professionals – to represent and assist the trustee or debtor in possession in carrying out its duties under the Bankruptcy Code. Section 327 […]
Good news: structured dismissals have survived Supreme Court scrutiny. Bad news: dismissals may be harder to structure, given yesterday’s 6-2 decision overruling the Third Circuit in Jevic narrowing the context in which they can be approved. We now have guidance on whether or not structured dismissals must follow the Bankruptcy Code’s […]
In a recent decision by the United States Bankruptcy Court for the District of Delaware, In re Hercules Offshore, Inc., et al., Judge Kevin J. Carey confirmed Hercules Offshore’s plan over objections by the Equity Committee—including an objection to allegedly impermissible plan releases and exculpations.
LBOs can get messy. Such was the case for the Tribune Company, which, in conjunction with its private equity investor, borrowed approximately $10.7 billion in 2007 to finance its buyout. Soon after the LBO was completed, Tribune experienced financial difficulties that made it unable to service its new debt, and, […]