Join Baker Hostetler practitioners Marc Hirschfield and Ferve Ozturk as they discuss key caselaw developments in make-whole premiums and the Trust Indenture Act.
A make-whole premium is a lump-sum payment that becomes due under a financing agreement when repayment occurs before the stated maturity date, thereby depriving the lender of all future interest payments bargained for under the agreement. Recent caselaw developments in the Momentive and Energy Future Holdings cases have more clearly defined the legal landscape for the allowance of make-whole premiums in Chapter 11 restructuring cases on the critical issues of drafting, voluntary redemptions versus acceleration, and rescission and the automatic stay. They have also shed light on the role of equitable considerations and the debtor’s insolvency.
The Trust Indenture Act of 1939 is a statutory provision dating back to the New Deal. The recent cases of Marblegate Asset Management and Caesars Entertainment have broadly read a provision of the Act to bar any non-consensual change to the existing bond indenture that would affect any bondholder’s ultimate payment rights in the context of an out-of-court restructuring. These decisions have raised the issue of whether the Act gives a distressed company’s minority bondholders the power to hold up a restructuring to which the majority bondholders agree.
I. Understand issues surrounding make-whole premiums and the Trust Indenture Act
II. Explore recent caselaw providing guidance on the recovery of make-whole premiums in bankruptcy and the impact of the Trust Indenture Act on creditors and debtors
III. Identify areas for future legal development on these topics
The King & Queen have held court. Another Great lecture
The specificity of the topics allowed you to go into a good level of depth which I appreciated. Very nice job. Thanks.
Course was great!