Posts Tagged
Paul Silverstein
We asked our expert Contributors to weigh in on Exclusive Opportunism – the trend of preserving exclusive financial opportunities for select creditors without offering that opportunity to all creditors of the relevant class — all in exchange for voting in favor of the debtor’s plan. While the Peabody case seemed an outlier at the time, it has since become the go-to strategy for debtors making it the namesake for this inaugural award. Contributor Paul Silverstein provides a high level summary of the issues relating to exclusive opportunism, focusing on potential violations of Section 1123(a)(4) and of the Supreme Court’s decision…
Over the past decade, or so, we have seen situations in Chapter 11 cases where groups of creditors contracted with debtors for the exclusive right to provide new money on extremely favorable terms, with significant “backstop†fees paid in connection therewith, and other creditors in the same class were excluded from participating in such investments. E.g., Peabody Coal, CHC Helicopter, Pacific Drilling, Momentive and most recently, LATAM Airlines and TPC Group. The specific mechanics of these transactions vary but they generally arise in DIP loans (e.g. Toys R Us), or in exit financings to be implemented under a reorganization plan. In connection…
Tell us what you think of recent decisions by the District Courts in the SDNY and EDVA reversing plan confirmation based on presence of non-consensual third-party releases? Did these Judges get it right? How do non-consensual third-party releases affect creditor rights (both positively and negatively)? What are the implications of these decisions more broadly for the efficacy and integrity of the Chapter 11 process?