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Tyler R. Ferguson

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On November 26, 2019, the US Court of Appeals for the Fifth Circuit held in Ultra Petroleum Corp. v. Ad Hoc Committee of Unsecured Creditors of Ultra Resources1 that the US Bankruptcy Code limits in certain respects the right of creditors to enforce contractual claims for a “make-whole” premium owed under a note agreement as the result of the debtor’s prepayment of the notes. The Ultra Petroleum case may ultimately lead to a decision addressing the unresolved questions of whether, and in what circumstances, a claim for a make-whole premium must be disallowed as “unmatured interest” under Section 502(b)(2) of the Bankruptcy Code.
Continue Reading US Bankruptcy Code Defines Right to Receive “Make-Whole” Premium under Chapter 11 Plan

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

Yesterday, in an 8-1 decision, the US Supreme Court held in Mission Product Holdings, Inc. v. Tempnology, LLC1 that under Section 365 of the Bankruptcy Code, a debtor-licensor’s rejection of a trademark license agreement does not terminate the rights of the licensee to continue using the trademark where those rights would otherwise survive the licensor’s breach of the agreement under non-bankruptcy law.2  The Tempnology decision resolves the most significant unanswered question regarding the treatment of trademark licenses in bankruptcy.
Continue Reading Trademark Licensee May Continue Using Trademark Following Debtor’s Rejection of License Agreement, Supreme Court Rules

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.
Continue Reading Debtor Is a Financial Institution for Purposes of Settlement Payment Safe Harbor, Rules Southern District of New York