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Many feared that Congress would take the opportunity in connection with the U.S. financial reform legislation now known as the Dodd-Frank Wall Street Reform and Consumer Protection Act to authorize private actions for aiding and abetting securities law violations.
The U.S. Supreme Court recently addressed for the first time the extraterritorial reach of the primary antifraud provision of the securities laws, § 10(b) of the Securities Exchange Act. The Court rejected the analysis developed by lower courts over the course of forty years and adopted its own bright-line rule: § 10(b) applies only to securities transactions that occur in U.S. territorial jurisdiction and purchases and sales of securities listed on U.S. exchanges.
On April 5, 2010, ISDA launched a new non-cancellable version of the U.S. loan credit default swap product called "Bullet LCDS," which is designed to promote liquidity in the LCDS market and take advantage of certain standardization improvements applied to the CDS market in 2009.
In our Distressed Investor Alert dated December 23, 2009, we wrote that Bankruptcy Rule 2019 had returned to the public eye with a vengeance in light of the controversial pending amendments to Rule 2019 proposed by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States.
Recent commentary suggests growing unease about the possibility of default by issuers of state, municipal and instrumentality bonds.
This article authored by Richards Kibbe & Orbe LLP partner Kenneth E. Werner discusses recently passed legislation by the House of Representatives, which would prevent a portion of income realized from carried interests in investment partnerships from being characterized as capital gain.
Holders of bank debt and bonds are increasingly being offered equity as part of bankruptcy reorganizations and out-of-court restructurings of distressed companies. For lenders who are unaccustomed to holding equity, this article provides a roadmap of key issues to look for when negotiating equity documents to help maximize the value of a minority equity stake.
A recent New York trial court decision applied established precedent to enforce “Big Boy” provisions in a credit default swap context, but – in a matter of apparent first impression – let stand a breach of contract claim alleging that...
In a recent decision, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York granted a preliminary injunction blocking the sale of a participation in a borrower’s loan. Judge Rakoff halted the sale...
Lehman Brothers Holdings Inc. and its affiliate and subsidiary debtors filed their proposed chapter 11 plan of reorganization on Monday, March 15, 2010. Although the plan lacks many details regarding potential recoveries for Lehman's creditors, it does provide information regarding...
The SEC has returned to the short selling regulatory arena after a hiatus of several months. On February 24, 2010, the Commission adopted an "alternative uptick rule" to restrict short selling when the price of a stock has dropped more...
The newly-revised LSTA forms of Distressed Trade Confirmation and Purchase and Sale Agreement for Distressed Trades now include a more comprehensive procedure for determining the "Shift Date" for any particular distressed loan whereby LSTA members may request that the LSTA...
Effective 25 January 2010, a revised set of Loan Market Association ("LMA") trading documentation will apply to all Par and Distressed Trades which are conducted on LMA standard terms. The revised documents apply to all LMA trades with Trade Dates of 25 January 2010 and going forwards.
In a case of great significance to the United States secondary loan market, on January 11, 2010, the U.S. Court of Appeals for the Second Circuit firmly established that the ancient doctrine of "champerty" – originally a prohibition on the transfer of litigation claims – has no further relevance to transactions in the loan market that are governed by New York law. In particular, a loan purchaser's intent to enforce rights through litigation does not render the purchase of the loan and related litigation claims unlawful champerty under New York law.
While legal theorists have long debated the differences between U.S. insider trading law, as defined by the U.S. courts and the Securities and Exchange Commission, and the European Union's Market Abuse Directive, a recent European Union high court ruling suggests...
Bankruptcy Rule 2019 has returned to the public eye with a vengeance in light of a recent ruling by the influential Bankruptcy Court for the District of Delaware and the controversial pending amendments to Rule 2019 proposed by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States.
The unprecedented economic crisis has led to increased scrutiny of secured creditors and challenges to rights generally enjoyed by them. Recent court decisions reflect a shifting of the pendulum from protection of secured creditors towards recoveries for unsecured creditors.
In the article "House Passes Bill That Would Eliminate Capital Gains Treatment For Carried Interests," Richards Kibbe & Orbe Partner Kenneth E. Werner discusses legislation passed by the House of Representatives which would prevent income attributable to carried interests in investment partnerships from being characterized as capital gains.
On September 25, 2009, the LSTA released its revised forms of (i) Par/Near Par Trade Confirmation and (ii) Distressed Trade Confirmation, each effective for LSTA trades entered into on or after that date. While the current changes are not overly...
In November 2009, the Staff of the SEC’s Division of Corporation Finance revised its September 2009 public guidance on how an investor should calculate the 10-day filing deadline for an initial beneficial ownership report on Schedule 13D.
In September 2009, the Staff of the SEC’s Division of Corporation Finance issued Compliance and Disclosure Interpretations relating to beneficial ownership reporting under Section 13 of the Securities Exchange Act.
In a closely-watched case important to the debt trading market, New York’s highest court recently decided that New York’s champerty statute does not bar the assignment of litigation claims to enforce rights in related debt instruments.
A follow-up memorandum addressing the question of the duty to disclose material non-public information in non-securities transactions under New York law and whether a Big Boy provision may affect any such duty to disclose.
In United States v. Ruehle, Slip. Op. (9th Cir. Sept. 30, 2009), the Ninth Circuit reversed the suppression order issued in United States v. Nicholas, 606 F.Supp.2d 1109 (C.D.Ca. Apr. 2009) based on the lower court’s application of the wrong privilege standard, but left intact that portion of the Nicholas opinion suggesting that attorneys need to provide and document complete Upjohn warnings and avoid dual representations absent a written conflict waiver.
Richards, Kibbe & Orbe partner, Ken Werner, discusses an IRS memorandum that may have significant implications for offshore entities investing in debt obligations of US entities.
Credit agreements typically provide that any amendment permitting the release of "all or substantially all" of the collateral requires the unanimous consent of the lenders. Many market participants expect that this provision requires that all lenders consent to the agent...
The recent steady drumbeat of Chapter 11 bankruptcy filings is producing an equally persistent corollary: creditors receiving new securities issued by the reorganizing debtor under its plan of reorganization. Section 1145 of the Bankruptcy Code may offer these creditors the...