•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Bailey McCann, Opalesque New York:

Lawmakers and lobbyists backed by private funds including Apollo Global Management are pushing for a change to a decades old bankruptcy rule. Apollo and others have been pushing for a change to the Trust Indenture Act of 1939 to be included in a spending bill that must be passed in the US by Friday, in order to avoid a government shutdown. If successful, the change would limit the ability of bondholders to bring lawsuits against companies in bankruptcy.

The Trust Indenture Act essentially protects creditors if a company does something that would make it difficult to pay principal or interest payments. Backers of the change are currently involved in the litigious Caesars Entertainment Corp bankruptcy, and claim that bondholder lawsuits threaten to drag the parent company into Chapter 11. According to a piece in the Wall Street Journal, Caesars has been working with law firm Brownstein Hyatt Farber Schreck to get the rule change included in the spending bill. The group was close to having it included in the recently passed highway bill but it got left out at the last minute.

Repealing the law would apply retroactively and bail out Caesars Entertainment Corp from going into bankruptcy alongside its already bankrupt operating company. The change could also create a new playbook for private funds managers invested in companies ......................

To view our full article Click here