A corporate restructuring and bankruptcy BLOG

    Officially Official in Puerto Rico, Boy Scouts Trial, LATAM Gets its Cash

    What's News
    March 18, 2022

    Below is our initial take on recent bankruptcy-related developments:

    Puerto Rico Exits Bankruptcy After Grueling Debt Negotiation | ABC News

    Puerto Rico’s government formally exited bankruptcy this week, completing the largest public debt restructuring in U.S. history.

    S&K Take: The Effective Date of the Plan of Adjustment for the Commonwealth of Puerto Rico has now occurred, meaning that Puerto Rico has officially emerged from bankruptcy protection. Two proceedings remain, for the Highway Transportation Authority and PREPA, the electric utility. Despite that, this is a great achievement. The bankruptcy was filed in 2017, followed shortly by Hurricane Maria, which exacerbated the island’s financial issues. Congrats to all of those involved.

    Trial Over Approval of Boy Scouts Bankruptcy Plan Begins | Associated Press

    A closely-watched trial began this week in the U.S. Bankruptcy Court in Delaware, where a judge will determine whether to confirm Boy Scouts of America’s proposed reorganization plan.

    S&K Take: What promises to be a lengthy confirmation process has kicked off, although there was news that the Roman Catholic Ad Hoc Committee has settled their plan objection. Releases will certainly be an issue, among other points of contention. We will keep tabs on this and report as things progress.

    LATAM Airlines Bankruptcy Judge OKs $734 Million In Financing Fees | Reuters

    A bankruptcy judge in New York recently approved LATAM Airlines’ request to pay $734 million to major creditors in return for their pledge to guarantee a $5.44 billion capital raise, finding the fees are reasonable.

    S&K Take: Some staggering numbers in this one, although this financing is only one piece of the puzzle in these cases. Judge Garrity ruled that paying the fees was within the Debtors’ business judgment, which, as we all know, is a deferential standard. The Judge found that the fees were market tested through the mediation process and that they were commensurate with the risk the lenders are going to bear. As noted, this is a part of an $8 billion exit financing puzzle that the Debtors are seeking to figure out.

    The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

    SUBSCRIBE TO BACK IN (THE) BLACK

    Fill out the following form to receive our corporate restructuring and bankruptcy news and analysis.

    Group 25-1