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BankruptcyFeaturesLitigationThe Bankruptcy Strategist

Third Circuit Affirms Reversal of $275M Break-Up Fee in Del. Bankruptcy Case

By Tom McParland
October 01, 2018

The U.S. Court of Appeals for the Third Circuit on Sept. 13 upheld a Delaware Bankruptcy Court's decision to block a Florida-based energy company from collecting a $275 million merger termination fee against the bankruptcy estates of Energy Future Holdings Corp. and a subsidiary.

The precedential decision held that the lower court judge was correct to backtrack on an initial order allowing NextEra Energy Inc. to claim the break-up fee, finding that the judge had overlooked evidence crucial to the case. However, the ruling came over the objection of one appellate judge, who said the decision set a “troubling, if not dangerous” precedent.

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