► In This Issue:

• Adequately Reforming Adequate Protection?
• Make-Whole Premiums Subject to Continued Scrutiny
• Two New Titles in at the ABI Bookstore
• Free Audio Journal Demo with ModioLegal this Thursday

Adequately Reforming Adequate Protection?

Jeffrey N. Rothleder Arent Fox LLP New York

Jordana Renert Arent Fox LLP New York

The last major revision to U.S. business reorganization laws occurred in 1978. In the nearly four decades since then, the markets and financial products, as well as the industry itself, have evolved. Accordingly, ABI established the Commission to Study the Reform of Chapter 11 to evaluate the U.S. business reorganization laws and propose reforms “that will better balance the goals of effectuating the effective reorganization of business debtors—with the attendant preservation and expansion of jobs—and the maximization and realization of asset values for all creditors and stakeholders.”

On Dec. 8, 2014, the Commission published its Final Report recommending revisions to the current Bankruptcy Code. The Report, which is approximately 400 pages long and the product of a nearly-three-year study undertaken by the Commission, recommends reform of numerous aspects of chapter 11 seeking to, among other things, reduce barriers to entry, facilitate certainty and more timely resolutions of disputes, enhance restructuring and sale options for debtors, and incorporate checks and balances on rights and remedies of the debtor and of creditors.

Some of the most striking recommendations relate to the determination of adequate protection and the modifications to debtor-in-possession (DIP) financing. This article provides a brief overview of the Report’s recommendations with respect to those sections.
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Make-Whole Premiums Subject to Continued Scrutiny

Jed Donaldson Spotts Fain, PC Richmond, VA

In recent months, bankruptcy courts and nonbankruptcy courts have addressed the enforceability of make-whole premiums (“make-wholes”) where borrowers have sought to repay loans prior to maturity, including In re Energy Future Holdings, Inc., et al. (EFH) pending before Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware, and the Second Circuit’s ruling in Chesapeake Energy Corp. v. Bank of New York Mellon Trust Co., issued in November 2014, which was a nonbankruptcy appeal from the Southern District of New York. Like prior decisions, Chesapeake and EFH demonstrate the need for careful, precise drafting that takes into consideration the likelihood that the make-whole will be analyzed in the context of distressed or bankruptcy litigation.
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Two New Titles in at the ABI Bookstore

Now available in the ABI Bookstore are two titles of interest to members of the Business Reorganization Committee. Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors provides practitioners with the information that they need to know when reviewing credit agreements, debtor in possession financing orders and sale orders related to credit bidding. A Practitioner’s Guide to Liquidation and Litigation Trusts gives bankruptcy professionals an overview of how and when trusts can be used to handle significant large-scale litigation matters and the liquidation of other assets for the purpose of accumulating recoveries and distributing them across multiple claimants. Be sure to log in to the site before ordering to receive ABI member pricing on the books.

Free Audio Journal Demo with ModioLegal this Thursday

We all know how important it is to stay informed in our area of expertise, but our hectic schedules can sometimes cause us to fall behind or neglect to keep up to date with our industry publications. ModioLegal has solved this problem by partnering with the ABI Journal to offer the exact same content as the print edition in a human-narrated, article-specific audio format that you can access away from your desk and on your smartphone at your convenience.

Hosted by the Young and New Members Committee, ModioLegal’s CEO will detail how ModioLegal helps attorneys maximize their time, and will conduct an interactive demonstration whereby participants will be able to try out the service on their smartphones. All participants will have the opportunity to sign-up for a free 1‑month trial at the webinar’s conclusion.

Register today to reserve your seat!

To view the articles in last month's edition of the newsletter, please click below:

• Erroneously Authorized UCC Termination Statement Results in $1.5 Billion Disaster
• The Risky Business Side of Bankruptcy Lawyering: ABI Chapter 11 Reform Commission Recommends Reform Regarding Professional Retention and Compensation
• Top Five Tips in Preparing for Bankruptcy Mediation