The Quebec government said yesterday that it was seeking some C$409 million ($377 million) from Montreal, Maine and Atlantic, the insolvent rail operator at the center of the rail disaster in the town of Lac-Megantic last year, Reuters reported yesterday. The claim is the latest in a growing list against the rail operator and other companies involved in the train shipment of oil from the Bakken fields that derailed and exploded, killing 47 people in the small Quebec town. The government, which filed its claim with court officials handling the claims process, said C$126 million was for funds already spent, while the remainder was for expenses it expected to incur. The government said that the size of its claim may be revised upward, once all its expenses were determined.
The U.S. Supreme Court handed Argentina a major setback in its long-running battle with a small group of determined creditors, heightening the risk the country will default for the second time in 13 years, the Wall Street Journal reported today. The justices yesterday rejected Argentina's appeal of a lower-court ruling that said that the country can't make bond payments until it compensates hedge funds that refused to accept restructured debt in the years following Argentina's 2001 default. Because of that earlier ruling, Argentina must decide by the end of the month whether to reach a deal with the holdouts or default on its next debt payment. Argentina's President Cristina Kirchner has refused to negotiate with the holdouts, calling them "vultures." But in an address Monday night, she said that Argentina wouldn't default on its restructured debt and would make its interest payment at the end of June. (Subscription required.) http://online.wsj.com/articles/u-s-supreme-court-rejects-argentina-appe…
For more on the Argentinian debt crisis, the Supreme Court’s ruling and what happens next, make sure to attend ABI’s Cross-Border Symposium on Friday in New York. The program will feature a keynote by James Millstein addressing the topic of Argentina’s debt situation. Millstein is the chairman and CEO of Millstein & Co. During his time as a managing director and the global co-head of corporate restructuring at Lazard, Millstein represented the Republic of Argentina in connection with the exchange offer for its international bond indebtedness. Register here: http://www.abiworld.org/CB14
The U.S. Supreme Court met privately yesterday to determine how to respond to Argentina's appeal of lower court decisions ordering it to repay more than $1.3 billion in defaulted bonds, the Associated Press reported yesterday. U.S. lower courts have ordered Argentina to pay that amount plus interest to hedge funds led by billionaire Paul Singer's NML Capital Ltd., which snapped up the debt left unpaid when the Argentine economy crashed in 2001-02 and went to court seeking payment in full. Holders of 92 percent of the debt agreed long ago to accept bonds of lesser value in exchange for regular debt payments. The justices aren't expected to announce their decision until next week. The court could ask for input from President Barack Obama's administration or send the case back to the New York appeals court for more information on how to interpret state law. Although it is highly unlikely, the court could also decide whether to take the case or turn it down. http://www.foxnews.com/world/2014/06/11/us-supreme-court-justices-to-de…
For more on this case, be sure to attend next Friday's Cross-Border Debt Symposium. James E. Millstein of Millstein & Co. (Washington, D.C.) will provide a keynote examining the Argentina case and its implications for sovereign debt restructuring. Register here: http://www.abiworld.org/CB14/
Businesses that go bust across borders in the European Union could seek restructuring over immediate liquidation under proposals approved on Friday by the bloc’s justice ministers, Bloomberg News reported on Friday. The new bankruptcy rules would make it easier to restructure a failing business and would provide rules for determining legal jurisdiction, the European Commission said in a statement. The proposals aim to give creditors a better chance to recoup their investment than if a troubled business were liquidated immediately. About 50,000 businesses a year are affected by cross-border insolvency proceedings, or one in four bankruptcies, according to European Commission data. The European Parliament approved its version of the rules in February. Nations and the parliament now will work together to try to reach a final accord by the end of this year.
Creditors of bankrupt Bitcoin exchange Mt. Gox have until Nov. 28 to file proof of their claims, according to a notice from its trustee, PCWorld.com reported today. Attorney Nobuaki Kobayashi, the court-appointed bankruptcy trustee for the Tokyo exchange, posted a notice on the Mt. Gox website Wednesday with details of the liquidation procedure. Creditor claims will be examined starting Feb. 25, 2015, nearly a year to the day after Mt. Gox went bust with liabilities of ¥6.5 billion ($63.6 million). Creditors could include hundreds of thousands of users who deposited bitcoin with the exchange. When it collapsed, Mt. Gox said nearly half a billion dollars’ worth of bitcoin was unaccounted for and that hackers had exploited a software problem.
A U.S. bankruptcy judge signed off on the sale of some €15 billion ($20.6 billion) of soured loans on the books of what was once one of Ireland’s largest banks as the country digs out from the wreckage of its collapsed property market, the Wall Street Journal reported today. Bankruptcy Judge Christopher Sontchi on Tuesday approved Irish Bank Resolution Corp.’s (IBRC) sale of the loan portfolios at a court hearing. IBRC, a state-backed bank liquidating the former Anglo Irish Bank Corp., is selling the bad loans at a discount to a group of distressed-debt buyers, including affiliates of Lone Star Funds, Deutsche Bank AG, and Goldman Sachs Group. Liquidators sought approval from the U.S. bankruptcy judge because of ties that some of the loans have to the U.S. Such ties include properties located in the U.S., or a borrower who is a U.S. resident or has become one since the loan was made. The green light from Judge Sontchi allows the sales to go through free of liens, claims and encumbrances as part of a chapter 15 bankruptcy proceeding in the U.S. that is linked to the Irish recovery.
Judges in Wilmington, Delaware, and Toronto jointly kicked off a novel cross-border trial yesterday to divvy up the $7.3 billion that was raised in the liquidation of once-mighty telecoms equipment maker Nortel Networks, which went bust in 2009, Reuters reported yesterday. Bankruptcy Judge Kevin Gross and Ontario Superior Court Justice Frank Newbould heard opening arguments yesterday from four attorneys: two in Wilmington and broadcast in Toronto, and two in Toronto and broadcast in Wilmington. The judges must decide how to allocate the money among former Nortel businesses in Canada, the U.S. and Europe. Administrators overseeing those former Nortel business units cannot repay creditors, make up pension shortfalls or pay off Nortel bonds until they know how much money they will receive.
To hear more about the Nortel case and other top cross-border cases and issues, be sure to join ABI in New York on June 20 for the Cross-Border Insolvency Program. For more information or to register, please click here: http://www.abiworld.org/CB14/
The historic Nortel Networks Corp. cross-border bankruptcy trial will begin today in Wilmington, Del., and Toronto, the Wall Street Journal reported today. Judges will decide how to divvy up $7.3 billion from the sale of patents and other assets between Nortel divisions in Canada, the U.S. and Europe. The trial is one of the largest bankruptcy cases ever dealt with in Canadian courts, and it will be closely watched in the legal community because of the unusual cross-border hearing conducted using closed-circuit video cameras before Justice Frank Newbold of the Ontario Superior Court and Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del. (Subscription required.) http://blogs.wsj.com/bankruptcy/2014/05/09/forward-motions-cross-border…
To hear more about the Nortel case and other top cross-border cases and issues, be sure to join ABI in New York on June 20 for the Cross-Border Insolvency Program. For more information or to register, please click here: http://www.abiworld.org/CB14/
A Canadian judge yesterday blasted the lawyers involved in the fight over $7.3 billion raised in the sale of Nortel Networks Inc.'s businesses, calling their tactics "a huge waste of money" and their fees "shocking,” the Wall Street Journal reported today. Citing the interests of thousands of pensioners who lost benefits and pay in Nortel's 2009 collapse, Justice Frank Newbould threw out a series of motions arguing over what evidence is to be presented at a trial set to start on Monday. The trial will determine how to split the proceeds of the sale of Nortel's businesses among the fallen technology giant's creditors around the globe. At an expected cost of at least $1 million a day, the trial is set to run for six weeks in the U.S. and Canada, two of the jurisdictions where Nortel has launched insolvency proceedings. Attorneys have been preparing for the trial for a year, following failed efforts to reach a compromise that would have allowed Nortel Canada, Nortel U.S. and Nortel Europe to split up the money and pay off creditors without a court battle.
Mt. Gox Co. creditors won a U.S. judge’s preliminary approval of a plan to settle with two of the bankrupt bitcoin exchange’s executives, Bloomberg News reported yesterday. The creditors propose to partner with outside investors to revive the exchange and compensate depositors. That deal also must be approved by a Japanese bankruptcy court. The Tokyo-based exchange filed for bankruptcy in February, when it said it couldn’t account for more than 850,000 bitcoins, which were then worth about $500 million. It later said 200,000 had been located.
