The uncertainty surrounding the COVID-19 pandemic has rocked the global economy, and companies of all types and sizes are feeling the impacts. In recent weeks, certain high-profile retailers filed for Chapter 11 bankruptcy protection. Some airlines are expected to enter bankruptcy as well, and even farmers are feeling the pinch. Overall, data suggest that bankruptcies … Continue Reading
As the COVID-19 pandemic continues, the hospitality industry is being hit particularly hard. Reservations and travel are down, while cancellations are up. The hotel sector in particular is facing momentous challenges, which is having a significant impact on the economy due to the fact that the hotel industry represents a significant segment of the US … Continue Reading
As the COVID-19 pandemic continues to unfold across the country, voluntary self-isolation efforts and a proliferation of state and local “shelter-in-place” orders have brought business activity to a screeching halt. As business leaders work feverishly to consider the options available to safeguard their companies, we recommend that they keep in mind the three C’s: Care, … Continue Reading
On October 7, 2016, Reed Smith assisted the International Energy Credit Association (“IECA”) in preparing an enforceability opinion for the release its Master Netting Agreement (the “MNA”) under both English and U.S. law.1 The MNA is billed as a state-of-the-art solution designed to manage the termination, close-out, and netting of both physical and financial transactions, including in the … Continue Reading
A pair of recent decisions adds more fuel to the debate over forum shopping by debtors. This time the issue involves application of the Bankruptcy Code’s safe-harbor provision in section 546(e). Conflicting interpretations by the courts in several circuits are undermining the certainty that was intended to protect financial markets and creating jurisprudence that varies … Continue Reading
The power of a bankruptcy court to authorize the sale of assets “free-and-clear” of liens and any other interests is a powerful tool that is used to realize value from distressed businesses. Indeed, purchasers will occasionally insist that sellers file a chapter 11 case in order to “cleanse the assets” by conducting their sale under … Continue Reading
A Flip on the Flip Clause: New York bankruptcy judge dismisses claims to recover approximately $1 billion that had been distributed to noteholders following commencement of the Lehman Brothers chapter 11 proceedings in September 2008. To continue reading more about the re-examining the controversial decision of Lehman Bros. Special Fin. Inc. v. BNY Corp. Trustee … Continue Reading
This appeal arose out of the litigation fallout from the Bernard Madoff Ponzi scheme. In the appeal, the Privy Council considered whether, at common law, an agreement to submit to jurisdiction must be express or whether it could be implied or inferred. The Board of the Privy Council found that an agreement to submit to … Continue Reading
Reed Smith’s global Commercial Restructuring & Bankruptcy team have recently published the January issue of their quarterly newsletter. The newsletter provides a detailed review of some of the most important legal developments in the sector. The January issue includes the following: In this Issue: Deed-In-Lieu, or Not Ninth Circuit Reverses Lower Courts, Finds Substantially Completed Plan Is … Continue Reading
To qualify as a “debtor” under the U.S. Bankruptcy Code, an entity must reside, have a place of business or property in the U.S. It is common for non-U.S. entities that file for chapter 11 protection to rely on the “property” element of §109(a). Property has traditionally been widely construed, with it now being commonly … Continue Reading
In a September 18, 2015 order, the U.S. District Court for the Southern District of New York affirmed a bankruptcy court order denying administrative claim treatment to Hudson Energy Services, LLC (“Hudson”) for its retail sales of electricity to the debtor.1 The decision does not address any “safe-harbor” or forward contract issues, but is among … Continue Reading
In a recent decision related to the SemCrude bankruptcy, the federal district court upheld the Bankruptcy Court’s rulings on the efficacy of certain common risk-mitigation tools used in the energy trading and marketing business – namely product payment netting and cross-product setoff upon liquidation and closeout. The decision comes amid long-running challenges from producers who … Continue Reading
While it is clear that chapter 11 of the U.S. Bankruptcy Code can be an effective tool of reorganisation for distressed foreign shipping companies that are locked in an adversarial dispute with their creditors, should an English scheme of arrangement be considered as an alternative to a U.S. bankruptcy case for shipping companies that are … Continue Reading
The Court of Appeal has just decided a “novel question of bankruptcy law: may a case arising under chapter 11 ever be resolved –in a ‘structured dismissal’ that deviates from the Bankruptcy Code’s priority system?” In its May 21, 2015, Opinion, it held in a “rare case, it may.” In re Jevic Holding Corp. (3d … Continue Reading
Reed Smith’s global Commercial Restructuring & Bankruptcy team have recently published the May issue of their quarterly newsletter. The newsletter provides a detailed review of some of the most important legal developments in the sector. The May issue includes the following: How Safe are the Bankruptcy Code Safe Harbors? Stockton’s Chapter 9 Plan Approval Delaware Chancery … Continue Reading
In Krol v. Key Bank National Association, et al. (In re MCK Millennium Centre Parking, LLC), Adv. No.14-00392 (N.D. Ill. Apr. 24, 2015), the U.S. Bankruptcy Court, Northern District of Illinois (the “Court”) issued a decision of particular importance to lenders and securitization servicers facing complications from the bankruptcy of a borrower involved in a … Continue Reading
In the latest EIA STEO Report (April 2015), the DOE projects oil prices for WTI to remain around or below $60 per barrel for the balance of 2015 and grow to $70 per barrel in 2016. In this environment of excess supplies and relatively low prices, many believe in the likelihood of an increase in … Continue Reading
The bankruptcy court in Delaware recently joined a number of bankruptcy courts in other jurisdictions protecting trademark owners’ rights to prohibit a debtor from either assuming or assigning a trademark without the trademark owner’s consent. In In re Trump Entertainment Resorts, Inc., Case No. 14-12103 (Feb. 20, 2015, Bankr. D. Del.), the casino operator Debtors … Continue Reading
On Friday the 13th (3/13/2015), the Court of Appeals for the 7th Circuit decided that a title insurer did not have to provide coverage to its insured – the perfected, first lien lender – for priming mechanics’ liens that – but for the Insured/Lender’s decision to cease funding, may not have occurred. In BB Syndication … Continue Reading
As disclosed recently in a bankruptcy court filing, on January 27, 2015, the Financial Crimes Enforcement Network (“FinCEN”) imposed a $10 million civil money penalty pursuant to the Bank Secrecy Act (the “BSA”) on Trump Taj Mahal Associates LLC. Trump Taj Mahal consented to the imposition of the penalty (subject to the bankruptcy court’s approval) … Continue Reading
As a reaction to the dramatic oil price volatility, many energy companies plan to streamline operations by reducing work force and shedding assets. Those who do so face tightening credit and decline in asset value that may impact the solvency of the business enterprise. Energy companies must maintain operations where possible to preserve value and … Continue Reading
Reed Smith’s global Commercial Restructuring & Bankruptcy team have recently published the February Edition of their quarterly newsletter. The newsletter provides a detailed review of some of the most important legal developments in the sector. The February issue includes the following: Minority Holders Gain Leverage Through Recent Interpretation of Trust Indenture Act New Jersey Joins Number … Continue Reading
Reed Smith’s global Commercial Restructuring & Bankruptcy team have recently published the October Edition of their quarterly newsletter. The newsletter provides a detailed review of some of the most important legal developments in the sector. The October edition covers diverse areas from the use of schemes of arrangements in England to attorney-client privilege issues in … Continue Reading
If you’re reading this, you understand the necessity of keeping up-to-date on global restructuring trends and developments. Reed Smith’s global restructuring group is known worldwide as one of the premier practices focusing on complex financial restructurings, workouts, bankruptcies, insolvencies and other matters involving financially distressed transactions. We represent clients in the United States, the United … Continue Reading
