To learn more about the ACIC website and update your bio,click here.
Questions & Comments
Questions or comments about this edition? Please provide feedbackhere
with the subject heading "Monthly Newsletter Feedback".
ACIC PRIVATE NOTES
Welcome to the February 2022 edition of the ACIC Private Notes!
This edition brings you:
Model form provisions proposed by the TPMC to address ratings rationale requirements related to private letter ratings;
Recent case law summaries from the Mid-Atlantic Region, prepared by Maggie Parker-Yavuz (Akin Gump) and Chanwon (Pio) Yoon (Akin Gump);
Recent case law summaries from the Midwest Region, prepared by Michael Robson (Greenberg Traurig);
A sneak peek of the 2022 Spring Investment Forum, courtesy of this year's co-chairs, Noelle Sproul (Nuveen) and Charles Calloway (Chapman & Cutler); and
A spotlight on the ACIC's new members, courtesy of Nicholas Dumas (Aflac Global Investments).
Proposed Model Private Rating Rationale Report Provisions
The Transaction Process Management Committee has proposed model form provisions to address ratings rationale requirements for securities with private letter ratings. Click here for the proposed language.
Sneak Peek of the 2022 Spring Investment Forum
The 2022 Spring Investment Forum is quickly approaching, taking place IN PERSON at the Four Seasons Chicago on April 7 & 8!
In order to maximize accessibility for its members, the ACIC is also offering a virtual conference experience for those unable to physically attend in Chicago (we note that the virtual option will be at a higher cost than the previous virtual conferences to contribute to the high cost of technology required to accomplish a hybrid in-person/virtual conference, but will still provide great value, especially in light of the conference being increased from 6 to 10 sessions). Please click here to read a message from the Forum’s co-chairs with an overview of events and session topics.
Also, Melody Cross and Kevin Braun are organizing team runs prior to the Thursday morning sessions so please reach out to one of them if you are interested in getting outside and seeing some beautiful scenery with your colleagues before the conference begins!
Recent Case Law Summaries
In In re Hertz Corp., 2021 Bankr. LEXIS 3491 (Bankr. D. Del. Dec. 22, 2021), the Hertz debtors filed a motion to dismiss the unsecured notes indenture trustees’ complaint seeking to recover make-whole premium and/or post-petition interest at the contract default rate in excess of the federal judgment rate. The U.S. Bankruptcy Court for the District of Delaware granted the debtors’ motion to dismiss the post-petition interest claim, and granted in part and denied in part the debtors’ motion to dismiss the make-whole premium claim. Click here to learn more.
In In re Tribune Co. Fraudulent Conveyance Litigation, 10 F.4th 147 (2d Cir. 2021), a bankruptcy litigation trustee brought fraudulent conveyance and other claims on behalf of creditors against shareholders who sold their stock in the Tribune Company’s leveraged buyout in 2007 and against financial advisors that assisted the Tribune Company with the leveraged buyout process. In several orders and decisions, the district court dismissed the trustee’s claims for failure to state a claim. The Second Circuitaffirmed the dismissal of the claims against the Tribune Company’s shareholders. The Second Circuit also affirmed the dismissal of the claims against the financial advisors except in the case of the intentional fraudulent conveyance claim against the solvency opinion provider, Valuation Research Company, and the constructive fraudulent conveyance claims against the Tribune Company’s financial advisors, Citigroup and Merrill Lynch. Click here to learn more.
In In re Purdue Pharma, L.P., 2021 Dist. LEXIS 242236 (S.D.N.Y. Dec. 16, 2021), the U.S. Bankruptcy Court for the Southern District of New York confirmed a chapter 11 plan of Purdue Pharma L.P. and its debtor affiliates which provided, among other things, that members of the Sackler family and individuals and entities related to them would be released from third-party claims, including a release of all civil liability for direct claims filed against them as individuals. On appeal, the District Court for the Southern District of New York vacated the bankruptcy court’s order confirming the plan on the basis that the Bankruptcy Code does not permit the granting of non-consensual releases of direct claims against non-debtors outside of the asbestos context. Click here to learn more.
In In re 3P Highstown, LLC, 631 B.R. 205 (Bankr. D.N.J. 2021), on creditor Hightstown Enterprises, LLC’s motion seeking dismissal, the Bankruptcy Court for the District of New Jersey dismissed a voluntary chapter 11 petition of the debtor 3P Hightstown, LLC based on a provision in the 3P Hightstown Limited Liability Company Agreement that restricted the debtor’s authority to file unilaterally for bankruptcy without the consent of debtor’s preferred equity class. Click here to learn more.
In Sauter v. Brack, 2020 WL 5104870 (Ind. Ct. App. March 31, 2020), in a dispute between the guarantor of a promissory note that was subordinated to a previously granted commercial loan and the junior lender, the Indiana Court of Appeals held that a payment guarantee of indebtedness may only be enforced when payments on the underlying debt instrument are due and payable. The court found that a guarantor may only be held liable within the terms of the guaranty itself and as such, the court must look to the specific terms of the debt instrument and any connected agreements, rather than a broad interpretation of the guarantee to bind any such guarantor when the initial debtor is not obligated to make payments. Click here to learn more.
In In re Hitz Restaurant Group, 2020 WL 2924523 (Bankr. N.D. Ill. 2020),in a bankruptcy proceeding relating to the interpretation of a force majeure clause in a restaurant lease in the Covid‑19 pandemic, the United States Bankruptcy Court for the Northern District of Illinois held that a Chicago restaurant was able to forego a portion of its rent as the State of Illinois’ Covid‑19 response had triggered the force majeure terms under the lease, resulting in a rent reduction. Click here to learn more.
In In re Murray Metallurgical Coal Holdings, LLC et al., 2020 WL 1307378 (Bankr. S.D. Ohio 2020), the Southern District of Ohio Bankruptcy Court overruled an objection brought by two employee benefit funds and held that a debtor in possession may pay prepetition claims of critical vendors prior to confirmation of the debtor’s Chapter 11 plan. Click here to learn more.
Spotlight on New Members
The ACIC is thrilled to welcome the following new members since August 2021:
John Beck (Hogan Lovells)
Nicholas Dumas (Aflac Global Investments)
Inderveer Hothi (Akin Gump)
Niki Khatami (SLC Management)
Sarah Challen McKee (Akin Gump)
Ron Silverman (Hogan Lovells)
Sarah Stanton (Northwestern Mutual)
Issa Yesufu (Northwestern Mutual)
To learn more about our newest colleagues, please click here.