How Distressed Lenders Are Navigating an Uncertain and Volatile Environment
When investing in distressed or “storied” situations, today’s lenders must double down on the energy and thoughtfulness of their approach to succeed in an environment characterized by unprecedented uncertainty and volatility. Because the road to recovery for the situation will likely be impacted by...
Jones Act Exemption Could Aid  Puerto Rico’s Economic Recovery
U.S. District Court Judge Laura Swain on January 18, 2022, approved a landmark plan to restructure Puerto Rico’s debt, allowing the U.S. territory to exit bankruptcy after five years. Judge Swain’s pen stroke approving the island’s plan of adjustment (POA) was a historic moment in Puerto Rico’s...
Puerto Rico Plans for Power Grid Transformation During PREPA Restructuring
The ongoing restructuring of the Puerto Rico Electric Power Authority (PREPA) is one of the largest ever in the electrical power generation industry within the jurisdiction of the United States. The goal is to transform the utility from a bankrupt, mismanaged public corporation into a privately...
Early Dealmaking Benefits Creditors, Debtors in Puerto Rico’s Restructuring
The bankruptcy of the Commonwealth of Puerto Rico and its instrumentalities is unprecedented in legal complexity and scale, with more than $120 billion of municipal liabilities subject to restructuring. To organize and facilitate this task, on June 30, 2016, President Barack Obama signed into law...
Important Court Rulings Arise from Puerto Rico’s Economic Crisis
On January 18, 2022, the U.S. District Court for the District of Puerto Rico entered an order under the Puerto Rico Oversight, Management, and Economic Stability Act, 48 U.S.C. §2101 et seq. (PROMESA), confirming a plan of adjustment for the Commonwealth of Puerto Rico and certain of its...
Public Pensions Spared from Cuts in Puerto Rico’s Restructuring
The Title III case of the Commonwealth of Puerto Rico has been much discussed in restructuring circles since the Financial Oversight and Management Board (FOMB) of Puerto Rico commenced the case approximately five years ago, on May 3, 2017. While many mainland discussions have centered on the...
Pros and Cons of Pre-Discovery Mediation in Mega Bankruptcy Adversary Proceedings
A 10-figure bankruptcy demands innovative approaches to case management and court administration, especially where large numbers of adversary proceedings are expected. One trend in recent cases—pre-discovery mediation—is proving successful in that regard, although it does have potential pitfalls of...
Subchapter V Provides a Promising Path for Settling Disputes  in Bankruptcy
For decades, mediation in bankruptcy has been a preferred method for resolving disputes involving distressed entities, and the enactment of the Small Business Reorganization Acct (SBRA), which became effective on February 19, 2020, practically ensured that this trend would continue. Since the 1980s...
Two Recent Complex Cases Demonstrate the Value of Mediation in Building Consensus
Complex Chapter 11 practice is, at its core, an exercise in consensus building. Mediation has historically been and remains a valuable tool in helping parties involved in Chapter 11 cases (large and small) reach consensus. Two recent examples underscore the value of mediation as a consensus...
Amendments to Delaware Local Rules Clarify the Scope of Mediation  Privilege
On February 1, 2022, amended local rules for the U.S. Bankruptcy Court for the District of Delaware went into effect. Among other things, the Bankruptcy Court’s revised local rules clarify the scope of mediation confidentiality protections. The amended local rules are likely to be seen as welcome...