Attorneys Analyze Recent Wesco Summary Judgment Opinions on Liability Management Transaction in Law360

In a Law360 article, attorneys analyzed therecent summary judgment opinions of the U.S. Bankruptcy Court for the Southern District of Texas in Wesco Aircraft Holdings Inc.’s chapter 11 case and provided considerations for companies and creditors considering non-pro rata uptier liability management transactions.

The decision, which granted in part and denied in part motions for summary judgment and permitted certain claims against Wesco to proceed to trial, could give “aggrieved creditors a roadmap for litigation and delay under the specter of ambiguity,” wrote business restructuring partner Ryan Preston Dahl, finance partner Leonard Klingbaum and business restructuring counsel Stephen Iacovo.

The court appears to endorse “a rule that might require all disputes around contractual provisions as questions that necessarily require fact-finding and trial,” the attorneys wrote. “Market participants should therefore think carefully as to how they can mitigate execution risks where nonparticipating creditors may believe they can inflict litigation costs on borrowers and their counterparties – regardless of the merit of the underlying arguments.”

Read the full article here.