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Bipartisan proposal for new small business provisions in Bankruptcy Code [American Bankruptcy Institute Journal; May 2019]

Latest memo from Oaktree’s Howard Marks on why this time market cycle isn’t different [OakTree; June 12, 2019]

Is the “vast” liquidity in the market a mirage?  Bloomberg chimes in [Bloomberg; June 13, 2019]

Morgan Stanley Business Conditions Index

Without additional explanation, the Supreme Court recently denied NextEra’s request for further review of its $275 million break fee request following the scuttling of its multi-billion dollar transaction to acquire the majority of Energy Future Holdings Corp.’s assets (see item 8 under “Certiorari Denied” list here).

Following the bankruptcy court’s reconsideration (and reversal) of

Over the past several years in the US, commentators have noted the resurgence of covenant lite deals, including increasingly in the middle market and direct lending space.  When (as?) the credit cycle turns, naysayers worry that these structures may impact lender recoveries, as borrowers lack incentive to start restructuring discussions with their lenders until it

Yesterday, the Supreme Court held in a 9-0 decision that a creditor cannot be held in contempt of court for violating a bankruptcy discharge order if there is a “fair ground of doubt” as to whether the order barred the creditor’s conduct.

This is primarily an objective standard, which depends on whether the creditor had

CNBC yesterday reported on new warnings from Morgan Stanley analysts about the potential for a near-term recession (CNBC: Morgan Stanley says Economy on Recession Watch), including economic indicators that many in the restructuring and bankruptcy industry are closely tracking.

Relevant data points discussed include slowing manufacturing activity, notable dips in the U.S. services

On April 23, 2019, the United States District Court for the Southern District of New York, in fraudulent transfer litigation arising out of the 2007 leveraged buyout of the Tribune Company, ruled on one of the significant issues left unresolved by the US Supreme Court in its Merit Management decision last year (which we addressed in a previous post).  The district court held Tribune’s post-bankruptcy litigation trustee was barred from asserting certain constructive fraudulent transfer claims against former Tribune shareholders based on what Judge Denise Cote termed a “straightforward” application of the Section 546(e) settlement payment safe harbor.  See In re Tribune Co. Fraudulent Conveyance Litigation, No. 12 cv 2652 (DLC), 2019 WL 1771786 (S.D.N.Y. Apr. 23, 2019). In addressing the extent to which a party’s status as a customer of a “financial institution” (as defined in the Bankruptcy Code) affects the applicability of Section 546(e), the district court was the first court post­-Merit Management to squarely address that question.
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In less than 24 hours beginning on May 1, 2019, Sungard Availability Services Capital, Inc., and its affiliates (collectively, “Sungard”) commenced and completed Chapter 11 proceedings in what has been described as the fastest Chapter 11 case ever. Sungard filed its Chapter 11 cases just before 9pm on May 1 in the Bankruptcy Court for the Southern District of New York, White Plains Division, and, before 6pm the next day, Judge Robert Drain entered an order confirming Sungard’s prepackaged Chapter 11 plan.[1] The Sungard debtors were able to obtain this rapid result through extensive pre-filing planning and negotiations, and likely also benefited from assignment of their cases to Judge Drain, who had prior experience in addressing similar, expedited pre-packaged cases.[2]
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