High Yield Debt

No Honor Among Creditors: Delaware Judge Issues Important Ruling On “Uptier” Transaction

07/27/22

Intercreditor disputes in bankruptcy are common.  Typically, however, they center around predictable disagreements between senior or junior classes of creditors such as valuation battles or lien perfection challenges.  A recent decision in the Delaware chapter 11 case of TPC Group has highlighted a new trend of “intra-creditor class warfare,” involving, in the understated words of

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Driving While Unimpaired – Delaware Judge Issues Important Ruling in Hertz Chapter 11 Case on Allowance of Make-Whole Premiums, Treatment of Unimpaired Creditors, and Postpetition Interest (Part 2)

02/09/22

The allowance of postpetition interest in solvent debtor chapter 11 cases has become an important issue in recent years for corporate issuers, bondholders and other creditors.  This post will examine a recent decision in the Hertz case by Judge Mary Walrath of the U.S.

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Driving While Unimpaired – Delaware Judge Issues Important Ruling in Hertz Chapter 11 Case on Allowance of Make-Whole Premiums, Treatment of Unimpaired Creditors, and Postpetition Interest (Part 1)

01/28/22

The treatment of make-whole premiums in chapter 11 cases in solvent debtor cases has become an important issue in recent years for corporate issuers and bondholders.  This post will examine a recent decision in the Hertz case by Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware on the allowance of such claims.  (Judge Walrath also addressed other topics in her decision pertaining to the treatment of unimpaired creditors and postpetition interest, which will be examined in a separate post.)

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Two Important Rulings on Payment of Indenture Trustee Fees in Chapter 11 Cases

11/29/21

Two recent judicial decisions, Sanchez Energy and Tribune Media, highlight the challenges faced by indenture trustees and their professionals in chapter 11 cases where there are no recoveries to noteholders. 

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New York Court of Appeals Splits From Second Circuit on Minority Bondholders’ Rights in Out of Court Restructurings

01/05/21

The New York Court of Appeals recently handed down an important opinion on out of court restructurings involving bond debt. In CNH Diversified Opportunities Master Account, L.P., v. Cleveland Unlimited, Inc., the Court of Appeals, in a 4–3 ruling, diverged from the Second Circuit’s ruling a few years ago in Marblegate Asset Mgt., LLC v Education Mgt. Fin. Corp. and resuscitated rights of minority bondholders under the Trust Indenture Act which were limited under Marblegate.

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Delaware Judge Rejects Challenge to Payment of Fees for Indenture Trustee in Southeastern Grocers Chapter 11 Case

06/12/18

Southeastern Grocers (operator of the Winn-Dixie, Bi Lo and Harvey’s supermarket chains) recently completed a successful restructuring of its balance sheet through a “prepackaged” chapter 11 case in the District of Delaware.

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Energy Future Holdings Make-Whole Ruling Extends Rationale of Important SDNY Decisions to Delaware

03/31/15

Judge Christopher Sontchi issued a notable opinion last week in the bankruptcy case of Energy Future Holdings Corp., et al. (“EFH”), Case No. 14-10979 (D. Del.), ruling that the repayment in full of certain senior secured notes did not trigger an obligation by the debtors to pay a make-whole premium.

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We've Seen This Movie Before - The Return of Covenant Lite and PIK-Toggle Debt

10/16/12

Even as the financial crisis of 2008-09 began to ebb, the so-called “wall of debt” loomed large. Hundreds of billions of dollars of leveraged and high yield debt issued during the irrational exuberance era was coming due by 2014, threatening to drive up default rates and posing an ongoing threat to the health of the international financial markets. 

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