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Karen B. Skomorucha Owens, Esq.
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Showing posts in Make Whole Payments / Prepayment Obligations

Applying New York Law, Third Circuit Holds That Acceleration Clauses Do Not Negate Make-Whole Redemption Provisions Absent Clear Contractual Language

Delaware Trust Co. v. Energy Future Intermediate Holding Co. (In re Energy Future Holdings Corp.), 842 F.3d 247 (3d Cir. 2016)

Disagreeing with the United States Bankruptcy Court for the Southern District of New York, the Court of Appeals for the Third Circuit held in this Opinion that New York law requires the Energy Future debtors (“EFIH”) to pay redemption premiums (or a “make-whole”) to their first and second lien noteholders under the terms of governing indentures.  In doing so, the Court reversed the district court decision affirming the Delaware Bankruptcy Court’s ruling (discussed here) that the… Read More

UPDATE – After Trial And Despite Likelihood Of Success On The Merits, Bankruptcy Court Holds No “Cause” To Lift Automatic Stay, Ending Make-Whole Adversary Proceeding in EFH

Delaware Trust Co. v. Energy Future Intermediate Holding Co. (In re Energy Future Holdings Corp.), Adv. Pro. No. 14-50363 (CSS), — B.R. — (Bankr. D. Del. July 8, 2015)

Previously, the Delaware Bankruptcy Court determined that an evidentiary hearing was necessary on the issue of whether “cause” exists to lift the automatic stay with respect to the make-whole dispute.  For a general background of the facts and law, see our recent blog post here.  Now, after a three-day trial, Judge Sontchi has held that, under the totality of the circumstances, cause does not exist to lift the… Read More

Significant Headway Made Relating To EFH Make-Whole Dispute, But Stay Relief Motion And Make-Whole Liability Hang In The Balance

Delaware Trust Co. v. Energy Future Intermediate Holding Co. (In re Energy Future Holdings Corp.), Adv. Pro. No. 14-50363 (CSS), — B.R. — (Bankr. D. Del. Mar. 26, 2015)

On March 26, 2015, Judge Sontchi made a significant, but not entirely dispositive, ruling in the on-going make-whole litigation encompassed within the Energy Future Holdings Corp. (with its affiliates, the “Debtors”) bankruptcy proceedings.  In this Opinion, Judge Sontchi granted summary judgment for the Debtors in part, ruling that (i) the bankruptcy filing caused an automatic redemption and no “Applicable Premium” or make-whole was due; (ii) the EFIH Debtors’ did… Read More

Discovery Regarding a Debtor’s Valuation and Solvency Held Relevant to Makewhole Dispute

In the CSC Trust Co. adversary proceeding pending in connection with the Energy Future Holdings Corp. bankruptcy proceedings, an indenture trustee for certain senior secured notes sought a declaration from the Court that certain debtors (the “EFIH Debtors”) are obligated to pay a redemption premium in connection with a proposed refinancing of the notes.  In his Opinion, Judge Sontchi held discoverable information regarding the EFIH Debtor’s valuation and solvency, finding that such information is relevant to the amount that may need to be paid should an enforceable makewhole provision be found.  Despite the foregoing, however,… Read More