Bond ' Supersedeas Bond

Cue the 007 theme song; there's a new bond in town. The Delaware Bankruptcy Court, in the Chapter 11 cases of In re Tribune Company, et al. (In re Tribune), Case No. 08-13141 (Bankr. D. Del. Aug. 22, 2012), recently granted a motion for a stay pending appeal of its order confirming Tribune's fourth amended joint plan of reorganization (and other confirmation-related decisions), but conditioned the imposition of the stay upon the posting of a $1.5 billion supersedeas bond. No, that's not a typo; it's billion, with a capital “B.” Noting the classic clash of competing interests to be reconciled in determining whether to grant the requested stay pending appeal ' no meaningful appellate review of bankruptcy court rulings, on the one hand; significant additional estate costs and potential plan collapse, on the other ' the bankruptcy court calculated that a stay pending appeal, together with a $1.5 billion bond, was necessary to achieve the appropriate balance between these two legitimate, competing interests. How the bankruptcy court reached this calculation, and what creditors need to take away from this decision, is the subject of this article.