Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Second Circuit Reverses District Court in <i>Marblegate</i>, Making It Easier to Restructure Bonds Outside of a Chapter 11 Case

By Alan R. Glickman, David M. Hillman, Ronald B. Risdon and Minji Reem

On Jan. 17, 2017, in a closely watched dispute surrounding Section 316(b) of the Trust Indenture Act of 1939, the U.S. Court of Appeals for the Second Circuit issued its long-anticipated decision in Marblegate Asset Management, LLC v. Education Management Finance Corp., No. 15-2124-CV(L), 2017 WL 164318 (2d Cir. Jan. 17, 2017) (the “Decision”). In a 2-1 ruling reversing the district court, the court of appeals construed Section 316(b) narrowly, holding that it only prohibits “non-consensual amendments to an indenture's core payment terms” and does not protect noteholders' practical ability to receive payment. Decision at *1.

In so ruling, the Second Circuit considered the issue arising in the recent Southern District of New York District Court decisions in Marblegate (Marblegate Asset Management v. Education Management Corp., 75 F.Supp.3d 592 (S.D.N.Y. 2014) (Marblegate I); Marblegate Asset Management, LLC v. Education Management Corp., 111 F.Supp.3d 542 (S.D.N.Y. 2015) (Marblegate II)), and two cases relating to Caesars Entertainment (BOKF, N.A. v. Caesars Entertainment Corp., 144 F.Supp.3d 459 (S.D.N.Y. 2015); MeehanCombs Glob. Credit Opportunities Funds, LP v. Caesars Entm't Corp., 80 F.Supp.3d 507 (S.D.N.Y. 2015) (collectively, BOKF/MeenhanCombs)), as to when an out-of-court debt restructuring may violate Section 316(b) of the TIA.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.