Karol Denniston

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Webinar Recording: What Happens After the Election? – What the Outcome of the Presidential and Senate Races Might Mean for the Economy, Key Industries and Municipalities

On Friday, October 16, 2020 we hosted a webinar along with the American Bankruptcy Institute, that featured a distinguished panel of professionals, including former Speaker of the US House of Representatives John Boehner, former Congressman and Chairman of the Democratic Caucus Joseph Crowley, former Congressman Bill Shuster, former Secretary of Transportation Rodney Slater, Karol Denniston … Continue Reading

Webinar Recording: COVID-19 Relief Funding & Reopening America – What Is Really Happening in Congress and What Are the Risks and Rewards of Resurrecting the US Economy?

On Thursday, May 21, 2020, the American Bankruptcy Institute (ABI) hosted a webinar, featuring a distinguished panel of professionals, including former Speaker of the US House of Representatives John Boehner, as well as the current senior US Senator from West Virginia, Joe Manchin, who shared their thoughts on how best to safely and gradually re-open … Continue Reading

A Breathing Spell From The Breathing Spell – Should A Chapter 11 Case Be Suspended During COVID-19?

In the past several years, the United States has seen a tidal wave of retail sector chapter 11 cases. The end result for most of those cases has been going out of business and liquidation sales. On March 11, 2020, Modell’s Sporting Goods commenced its chapter 11 cases seeking to follow a similar path taken … Continue Reading

Restructuring Considerations: Making the Most of Stimulus Relief

On March 26, 2020, the Senate approved a roughly $2 trillion stimulus package—the biggest economic stimulus in recent U.S. history—in response to the COVID-19 pandemic. This economic relief provides expanded protections for American families, workers, and businesses affected by the public health and economic crisis. The key measures included in the package are: Bailouts for … Continue Reading

Restructuring Protections In A Time Of Coronavirus

What do businesses and their lenders/investors need to do to minimize loss and to maximize long-term financial stability in this volatile and unprecedented environment? Our global supply chain and R&I teams have produced a recent article that focuses on: Preparing new projections. Developing new financial and operating plans. What to do if maintaining existing financing … Continue Reading

Will Bankruptcy Stay Criminal Proceedings For PG&E?

On January 29, 2019, California’s Pacific Gas and Electric, one of the nation’s largest utilities, filed for Chapter 11 bankruptcy protection.  PG&E’s bankruptcy is certain to be one of the largest and most complex restructurings in recent years and will involve state and federal regulators and a myriad number of issues, including the impact of … Continue Reading

Chapter 11 or Chapter 9: Investors Beware

Municipalities often drive economic development through subsidiaries and affiliated entities. When these “quasi-municipalities” become distressed, however, questions arise as to whether the potential debtor qualifies as a debtor under Chapter 11 or Chapter 9. This uncertainty can lead to litigation over whether the entity may proceed as a Chapter 11 debtor or is a governmental … Continue Reading

Keeping Special Revenues “Special”

Special revenues may not be as special as many bondholders have historically expected.  Two recent rulings[1] from District Court Judge Laura Taylor Swain in the Puerto Rico PROMESA proceeding have held that bond issuers are not required to make post-petition special revenue bond payments during a pending Puerto Rico Oversight, Management, and Economic Stability Act … Continue Reading

A Big Haircut for Indenture Trustee Counsel Fees

In Nortel Network’s (“Nortel”) chapter 11 case, In re: Nortel Networks Inc., et al., United States Bankruptcy Court for the District of Delaware, Case No. 09-10138(KG), Bankruptcy Judge Kevin Gross recently reduced the Indenture Trustee’s counsel fees by $913,936.00 in response to heavily litigated objections to the fees by noteholders, Solus Alternative Asset Management LP … Continue Reading

Marblegate’s Lost Marbles and Why Bondholders and Indenture Trustees Should Care

This week the U.S. Court of Appeals for the Second Circuit issued its highly-anticipated ruling in Marblegate Asset Management, LLC v. Education Management Corp. (“Marblegate”).  At issue in Marblegate was whether Education Management Corp. (“EDMC”) violated the Trust Indenture Act when it implemented a restructuring that impaired the rights of Marblegate Asset Management, LLC (“MAM”).  … Continue Reading

Stormy Seas for Indenture Trustees and Bondholders Settling Claims in Bankruptcy

Recently, in Caesars Entertainment Operating Co. (“Caesars”), U.S. Bankruptcy Judge A. Benjamin Goldgar denied payment of indenture trustee Wilmington Trust’s attorneys’ fees and costs in connection with the Debtors’ motion to approve a settlement.  The U.S. Trustee objected to payment arguing that the Debtor could not rely on 11 U.S.C. § 363 (seeking settlement approval) … Continue Reading

New Wormhole in Chicago’s Pension Black Hole

NASA defines a black hole as a place in space where gravity is relentless and pulls so much that not even light can get out.  And, so it goes with Chicago as it attempts to get out of its pension black hole. The recent Illinois Supreme Court opinion in Jones v. Municipal Employees’ Annuity and … Continue Reading

Bankruptcy Developments and Trends – A Look Back at 2015 and Into 2016

Restructuring partners Mark Salzberg and Karol Denniston, together with financial services partner, Michael Cuda, recently authored a chapter in “Inside The Minds: Chapter 11 Bankruptcy and Restructuring Strategies – Leading Lawyers on Navigating Recent Trends, Cases and Strategies Affecting Chapter 11 Clients” published by Thomson Reuters/Aspatore. In their chapter, entitled “New Developments in Chapter 11 … Continue Reading

Behind Sabine’s Curtain Lies Negotiation

This is the first of several posts on gathering agreements in bankruptcy, covenants running with the land and rejection claims that arise when a debtor finds gathering agreements financially burdensome. As our readers know, we waited with much anticipation for the Sabine ruling and wait with equal anticipation for the ruling on similar issues in … Continue Reading

Back To The Future: This Plummeting Oil & Gas Market Is Unlike Any Prior Crisis

Last week our Energy Restructuring Team attended the Energy CFO Roundtable in Houston that focused on “Restructuring in the Oil Patch”.  Stephen Lerner, the chair of our Restructuring & Insolvency Practice Group, was one of the panelists.  In this blog we summarize some of the important takeaways from the Roundtable, along with our current thoughts … Continue Reading

Pensions, Legislatures and the Judicial System- What Just Happened In Illinois?

Recently the Illinois Supreme Court unanimously rejected legislative pension reform, ruling that the 2013 legislation violated pension protections written into the state’s Constitution. Illinois’ Constitution provides that benefits promised as part of a pension system for public workers cannot be diminished or impaired. With a pension shortfall estimated at $111 billion, Illinois has struggled to … Continue Reading

Jefferson County: State Rate Setting Authority vs. The Bankruptcy Code

Recently the Eleventh Circuit agreed to hear Jefferson County’s (“JeffCo”) petition for appeal of U.S. District Court Judge Sharon Blackburn’s ruling refusing to dismiss one of three appeals filed by JeffCo’s sewer system ratepayers. Last fall, Judge Blackburn ruled that while JeffCo’s Chapter 9 plan of adjustment had been confirmed and new sewer warrants issued … Continue Reading

Showdown in Stockton: CalPERS Needs Dentist and Everyone Else Needs to Talk

Bankruptcy Judge Chris Klein recently issued his formal confirmation opinion in Stockton’s Chapter 9 bankruptcy case. While there were no real surprises, the opinion makes for entertaining reading given the Court’s more than serious conclusion that: …it is doubtful that CalPERS even has standing to defend the City pensions from modification, CalPERS has bullied its … Continue Reading

Illinois and Chapter 9: The Update

Illinois Governor Rauner presented his turnaround agenda in his “State of the State” address last week and called for, among other things, the state “to extend to municipalities bankruptcy protections.”  Mirroring the proposed legislation introduced by Representative Ron Sandack in January, and reported on in an earlier post, Illinois seems positioned to provide municipalities with clear … Continue Reading

Puerto Rico Municipal Restructurings: Back to The Negotiating Table

On February 6th, Federal District Judge Francisco Besosa ruled that Puerto Rico’s municipal debt-restructuring law, the “Recovery Act”, was unconstitutional stating that:  “The Recovery Act is pre-empted by the federal Bankruptcy Code and is therefore void.”  The Court also permanently enjoined current and future government officials from enforcing the Act.  Puerto Rico has announced that … Continue Reading

Is Illinois the Next Frontier for Chapter 9?

Illinois’ municipal distress is severe and we have witnessed the political maneuvers  to address Chicago’s ongoing fiscal dilemma.  In 2013, Chicago Mayor Rahm Emmanuel stoked bankruptcy fears citing the city’s ballooning pension obligations that he estimated could exceed $1.6 billion in 2016.  Pew Charitable Trusts has reported that among the nation’s five largest cities, Chicago … Continue Reading

Detroit’s Road Map

Say what you will about Detroit’s bankruptcy case, but when it is all said and done, the value for each of its participants most likely lies in the learning experience. And, experience is sometimes a painful teacher. One of the many take-aways is a framework for what constitutes a workable or “feasible” plan of adjustment … Continue Reading