In Federal Energy Regulatory Commission v. Ultra Resources, Inc. (In re Ultra Petroleum Corp.),1 a panel of the Fifth Circuit Court of Appeals (the “Fifth Circuit Panel”) provided.
Two recent judicial decisions, Sanchez Energy and Tribune Media, highlight the challenges faced by indenture trustees and their professionals in chapter 11 cases where there are no.
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The ability to assume or reject executory contracts is one of the primary tools used by debtors in a Chapter 11 reorganization. Where a debtor has a contract with a third party that is “executory” meaning that ongoing performance obligations remain for both the debtor and the contract counterparty on the date of the bankruptcy filing the debtor can choose to either assume or reject the contract under 11 USC § 365.
If a debtor chooses to assume the contract, it must cure all defaults under the agreement, and the agreement will “ride through” the bankruptcy unaltered. If the debtor rejects an executory contract, the rejection is treated as a breach by the debtor, and the counterparty to the contract is left with a claim in the bankruptcy for rejection damages caused by the breach. Generally, the standard applied by bankruptcy courts to determine whether rejection of an executory contract should be approved is low.
Following Unprecedented Winter Storm in Texas and Protection Granted under the CCAA in Canada, Just Energy Receives Chapter 15 Bankruptcy Protection in U.S.
All Services to customers across Company’s North American operations continue without interruption; no impact on customers’ bills, employees or daily operations expected
Filings and associated US$125 million Debtor in Possession (“DIP”) financing ensures Just Energy continues to meet its regulatory obligations in North America, including payments required by the Electric Reliability Council of Texas (“ERCOT”)
Filings provide stability for the Company as it facilitates the restructuring of its financial obligations due to the unprecedented winter storm impacts on the business