Mayer Brown strengthens its restructuring, bankruptcy insolvency practice with the additions of Adam Paul and Louis-Chiappetta [Mayer Brown; Aug. 2, 2019/Aug. 26, 2019]

The Wall Street Journal reports on a new uptick in oil and gas bankruptcies as new concerns arise in the industry [WSJ; August 30, 2019]

U.S. economy adds only 130,000 jobs in August, disappointing economists who had predicted greater growth [Washington Post; Sep. 6, 2019]

OxyCotin maker Purdue Pharma LP prepares for free-fall bankruptcy filing if it can not reach settlement over widespread opioid litigation [Reuters; Sep. 6, 2019]

Brazil’s Odebrecht Files for Bankruptcy in U.S. [WSJ; August 26, 2019]

Ditech plan rejected as judge finds that company can’t sell mortgage-servicing rights and reverse-mortgage business free and clear of consumer claims [Bloomberg; August 28, 2019]

First annual upturn in corporate insolvencies globally, since the financial crisis, with marked upturn in North America in particular [Atradius; August 27, 2019]

U.S. Second-Quarter Growth Revised Down to 2% Pace [Bloomberg; August 29, 2019]

In recent weeks, the dispute in Windstream’s bankruptcy between Windstream and its REIT spinoff Uniti Group over the lease transaction that ultimately led to Windstream’s chapter 11 bankruptcy has continued to escalate with Windstream filing an adversary complaint against Uniti.  In its complaint, Windstream seeks to recharacterize the lease as a disguised financing alleging that the lease resulted in a long-term transfer of billions of dollars to Uniti to the detriment of Windstream’s creditors. The debtors’ complaint also alleges that they were insolvent no later than the third quarter of 2017, and argues that the above-market rent payments and tenant capital improvements they were required to make under the lease constitute constructively fraudulent transfers, as the debtors have not received reasonably equivalent value under the lease.

Continue Reading Windstream Lease Dispute Escalates as Debtors Sue Uniti, Mediator Appointed, and Creditors Intervene

Bloomberg reports on slowing U.S. growth as trade wars weigh on businesses [Yahoo News, Bloomberg; July 26, 2019]

Windstream’s dispute with its REIT spinoff Uniti heats up, as Windstream seeks to recharacterize its $650 million-per-year lease agreement with Uniti as a disguised financing [Law360; July 25, 2019]

Virginia congressman’s bill on small business bankruptcy reform heads for Senate vote with bipartisan support [Radio WVTF; July 25, 2019]

Luxury department store chain Barney’s prepares for possible bankruptcy filing [CNBC; July 25, 2019]

Experts predict recession no later than second half of 2020 [Fox Business; July 25, 2019]

Economists find that higher inflation target by the Fed ahead of the 2008 recession likely would have resulted in a substantially faster recovery [WSJ; July 25, 2019]

The Momentive Performance Materials bankruptcy resulted in a number of disputes on issues germane to bankruptcy practitioners, including on intercreditor agreements (as we wrote about here), the enforceability of makewhole premiums and the proper interest rate in the context of a Chapter 11 cramdown plan.  On that third issue, Judge Drain entered an order on remand in April addressing the proper cram-down rate for two classes of senior noteholders that had been issued replacement notes under Momentive’s Chapter 11 plan. Given the notices of appeal filed just days later, it looked like another round of appellate review might occur.  But on May 15, Momentive announced that it had elected to refinance those notes, resulting in a voluntary dismissal of the appeals.

Continue Reading Replacement Financing Ends Momentive Cram-Down Rate Fight

Could the US already be in a recession?  [USA Today; June 25, 2019]

Puerto Rico’s Financial Oversight and Management Board proposes bankruptcy plan framework that would cut debt payments by half over the next 30 years [CNBC; June 16, 2019]

As part of proposed agreement between CFPB, attorneys general from 43 states and defunct for-profit college ITT Tech,  more than 18,000 students will have $168 million in private loan debt discharged [MarketWatch; June 17, 2019]

Lease transaction leading to Windstream bankruptcy following challenge by Aurelius last year, is scrutinized as non-market in Windstream bankruptcy potentially subjecting it to rejection by debtor [WSJ; June 17, 2019]

On June 19, Nicole Saharsky, co-leader of Mayer Brown’s Supreme Court & Appellate practice, discussed how free enterprise fared in the latest US Supreme Court term.  A webinar of the program is available here.

As discussed in our earlier post, during this term, Nicole and a Mayer Brown team which included partner (and blog co-host) Aaron Gavant along with  partner Andy Tauber and associates Matt Waring and Minh Nguyen-Dang, secured a resounding victory for creditors in the United States Supreme Court in a case involving when a bankruptcy court can impose contempt sanctions on a creditor for seeking to collect on a debt when it was unclear if that debt that was discharged in bankruptcy.

 

In this four-part You Tube series, Mayer Brown partner Jason Elder offers practical insights on high-yield debt for Asia-based issuers seeking to understand important covenants and trends.

 

Supreme Court agrees to review constitutional challenge to board overseeing bankrupt Puerto Rico’s finances [WSJ; June 20, 2019]

In this post, the LSTA questions the alleged opacity of CLOs as well as their potential for long-term stabilizing or destabilizing effects on financial markets [LSTA Website; June 20, 2019]

The question of whether a debtor’s plan of reorganization can include non-consensual releases for non-debtor parties has been hotly contested for several years, with circuit courts oftentimes split.  In his recent decision on the topic in the Aegean case,  New York Southern District Bankruptcy Judge Michael E. Wiles explored the limitations on such releases even in permissive jurisdictions such as the Second Circuit.

Specifically, as discussed further in this article by Mayer Brown attorneys Barbara Goodstein, Joaquin C De Baca, and Anastasia Kaup, Judge Wiles emphasized that such releases “are not a merit badge that someone gets in return for making a positive contribution to a restructuring … not a participation trophy, … not a gold star for doing a good job.”  Instead, permissible non-consensual, third-party releases must among other things, be tailored to particular claims and must be tied to specific actions taken by the third party as part of a debtor’s restructuring.