News & Publications

On April 19, 2021, the U.S. Supreme Court declined to hear the appeal of a landmark 2019 decision issued by the U.S. Court of Appeals for the Second Circuit regarding the applicability of the Bankruptcy Code's safe harbor for certain securities, commodity, or forward contract payments to prevent the avoidance in bankruptcy of $8.3 billion in payments made to the shareholders of Tribune Co. as part of its 2007 leveraged buyout ("LBO"). In its 2019 [...]

When is a loan not a loan? The SDNY Bankruptcy Court in In Re: Live Primary, LLC1 held that a $6 million start-up loan was actually an equity contribution after analyzing the terms of the transaction and the intent of the parties. The court recharacterized the loan as equity given the alleged loan functioned as an equity investment would be expected to function. As a result, the insider investor's claim was subordinated to the claims of creditors [...]

A recent decision by the United States District Court for the Southern District of New York highlights directors' fiduciary duty to evaluate all aspects of multi-stage transactions, including those portions to be effectuated post-closing by successor directors. In In re Nine West LBO Securities Litigation, the district court denied a motion to dismiss breach of fiduciary duty and aiding and abetting breach of fiduciary duty claims asserted against former directors of Jones Group, Inc. ("Jones Group") [...]