What we’re reading this week [September 13, 2021] – Insolvency / Bankruptcy / Restructuring

0

United States: What we’re reading this week [September 13, 2021]

To print this article, simply register or connect to Mondaq.com.

Law360 reported that the United States Office of the Trustee has filed a petition opposing a “death trap” provision contained in Avianca Holdings’ Chapter 11 reorganization plan. In the event of bankruptcy, the so-called “death trap” provisions reward categories of creditors who voted in favor of reorganization plans with higher payments in order to encourage them to vote to accept a given reorganization plan which would nevertheless pay off. less than what is arguably owed under other provisions of the Bankruptcy Code. As per Avianca’s plan disclosure statement, Avianca’s general unsecured creditors, who as a class owe $ 2.5 billion to $ 3.5 billion, would receive an option of $ 36 million in cash. or 2.5% of the equity of reorganized Avianca if the class votes in favor of the plan as opposed to $ 30 million in cash and 1.75% of the equity if the class votes against the plan. The U.S. trustee’s office argued that Avianca, Latin America’s second-largest airline, had failed to justify its use of the death trap provision in the plan. [Law 360; September 8, 2021]

Federal Reserve officials have indicated they may start cutting their $ 120 billion in monthly treasury bill and mortgage-backed securities purchases in November, according to the Wall Street Journal. The plans that are taking shape could curtail these purchases at a rate that concludes asset purchases by mid-2022. [WSJ; September 10,
2021]

Reuters reported that luxury furniture retailer ABC Carpet & Home had been granted permission to access $ 2.25 million on a $ 5.7 million loan on an interim basis to finance its continued operations during bankruptcy. ABC, which filed for Chapter 11 bankruptcy last week, is said to be looking to sell its assets by the end of October and already has a main offer of $ 15.3 million from 888 Capital, an entity controlled by Regal Investments. [Reuters; September 10,
2021]

Energy prices are skyrocketing in Europe, which the Wall Street Journal says has been spurred by a sudden slowdown in wind power generation off the UK coast in recent weeks. To fill the wind deficit, gas and coal-fired power stations have emerged to fill the gaps, raising prices. For electricity, UK prices more than doubled at their peak and were almost seven times higher than the same time last year. European markets could experience even bigger price shocks this winter, when energy demand is significantly higher, which could present system-wide stability issues. [WSJ; September 13, 2021]

Visit us on mayerbrown.com

Mayer Brown is a global provider of legal services comprising law firms that are separate entities (the “Mayer Brown Practices”). The Mayer Brown Firms are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, two limited liability companies established in Illinois in the United States; Mayer Brown International LLP, a limited liability company incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales under number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a partnership of Hong Kong and its associated entities in Asia; and Tauil & Checker Advogados, a Brazilian law partnership in which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are registered trademarks of Mayer Brown Practices in their respective jurisdictions.

© Copyright 2020. The Mayer Brown Practices. All rights reserved.

This article by Mayer Brown provides information and commentary on legal issues and developments of interest. The foregoing does not constitute a complete treatment of the matter at hand and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action on the matters discussed in this document.

POPULAR POSTS ON: Insolvency / Bankruptcy / Restructuring from the United States


Source link

Share.

About Author

Leave A Reply