The Second Circuit Court of Appeals issued a summary order this week upholding the aggressively unfavorable treatment of a senior secured creditor under the reorganization plan (the “Plan”) of DBSD North America, f/k/a ICO North America (“DBSD”). (The Second Circuit upheld a separate challenge to the plan brought by an unsecured creditor). The summary order states that … Continue Reading
Some legal commentators have lamented the extent to which lenders have been able to use debtor in possession (“DIP”) financing arrangements to gain control over an entire Chapter 11 case. DIP lenders have usually been able to justify aggressive provisions, and courts have approved them, on the basis that they may provide the only realistic chance … Continue Reading
The chapter 11 case of DBSD North America, Inc. (“DBSD”), f/k/a ICO North America, has been marked by aggressive tactics and extreme positions from its commencement. DBSD, a non-operating satellite communications company, and its second lien noteholders made clear their intent to cram down a plan of reorganization (the “Plan”) on DBSD’s first lien lenders. A competitor … Continue Reading
The U.S. Court of Appeals for the Third Circuit has ruled in Visteon that retiree medical benefits cannot be terminated by a debtor during the pendency of a Chapter 11 case – even if the benefit plan reserved the debtor’s right to terminate such benefits at any time — unless the debtor complies with the … Continue Reading
Another member of the Delaware Bankruptcy Court has weighed in on the appropriate scope of Bankruptcy Rule 2019 (see previous post). Judge Brendan Shannon signed an order a few days ago that directs the Ad Hoc Committee of Noteholders in the chapter 11 case of Accuride Corporation to comply with the rule’s disclosure requirements. No written opinion has … Continue Reading
Last month, many distressed investors and chapter 11 professionals viewed Judge Mary Walrath’s decision on Bankruptcy Rule 2019 as a possible tipping point in the ongoing debate regarding the reach of Rule 2019’s disclosure requirements with respect to so-called ad hoc committees. These typically are groups of holders of a particular tranche of a debtor’s public bonds … Continue Reading
