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  • Are Intercreditor Agreements Now Going According to Plan?

    August 02, 2016 |

    Intercreditor agreements are of greater importance given today's active secondary loan market, which clears a path for the debtor's original relationship lenders to sell their interests should a restructuring loom. Distressed debt purchasers, on the other hand, may have different objectives that make them less willing to join forces with longer-term holders.

  • A Perfected Lien Is Trumped: Must It Be 'Use It or Lose It'?

    April 02, 2016 |

    As creditors well know, a lien holder must be vigilant in both perfecting and maintaining the perfection and priority of its lien. But even a creditor that properly maintains its lien may find that enforcement of (or more specifically, failing to enforce) that lien can affect priority.

  • District Court Affirms Cramdown Interest Rate Calculation in Momentive

    September 02, 2015 |

    On May 5, 2015, United States District Judge Vincent L. Bricetti affirmed the confirmation order issued by United States Bankruptcy Judge Robert D. Drain in the MPM Silicones LLC ( Momentive ) Chapter 11 cases. We discussed the facts and analyzed Judge Drain's ruling with respect to the applicable cramdown interest rate to be applied to secured claims under section 1129(b)(2)(A)(i) of the Bankruptcy Code in a prior article ( see "Cramdown Interest Rates in Chapter 11," Equipment Leasing Newsletter , March 2015, http: //bit.ly/1Jr81HU). On appeal, the senior lien appellants argued that the plan of reorganization confirmed by Judge Drain violated section 1129(b) by using a "formula approach" to calculate the cramdown interest rate, and, in the alternative, by calculating the cramdown interest rate under the formula approach incorrectly.

  • The MAC Clause

    December 23, 2013 |

    This article is the second in a continuing series on resolving contentious issues in sophisticated lease transactions. In this installment: The MAC Clause.

  • Con Ed Reversal Ends LILO/SILO Saga ' And Then Some

    March 28, 2013 |

    In January, the U.S. Court of Appeals for the Federal Circuit handed down its decision in Consolidated Edison Company of New York, Inc. v. United States. The decision reverses the only lower court case that had decided a LILO or SILO transaction in favor of the taxpayer, and likely ends the decade-long litigation of these contentious leveraged lease cases.

  • State Legislatures Consider UCC Article 9 Amendments

    July 28, 2011 |

    In early 2009 we reported about the formation by the Uniform Law Commission and the American Law Institute of a drafting committee to consider the first comprehensive set of changes to Article 9 of the Uniform Commercial Code since the amendments approved in July 1998. Given that approximately six months have elapsed since the launch of the legislative approval process for the 2010 amendments, we thought it an opportune time to review the progress of adoption of these amendments.

  • LILOs and SILOs: The Final Chapter?

    June 28, 2011 |

    In what may be the final chapter in the years of litigation over tax-exempt entity leasing transactions, the Circuit Court of Appeals affirmed the Federal Claims Court's decision disallowing Wells Fargo's deductions from SILO transactions.

  • Recovering the Value of Preferential Transfers of Goods or Equipment: Seller Beware

    March 26, 2008 |

    Imagine you are an equipment manufacturer. You sell $45 million in goods to a reliable customer on credit, shipping them to a third-party warehouse to be held for the customer to pick up when needed. Months later, unable to pay and sliding toward bankruptcy, the customer returns the unused equipment. The next thing you know, the customer, having filed for bankruptcy, sues YOU to recover not only the $45 million value of the returned equipment, but also an additional $55 million in cash payments the customer had made.