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Bank of New York Mellon v. Realogy Corporation, 2008 WL 5259732, is a case that was decided in Delaware's Court of Chancery in 2008. [1] The court held that a company's proposed debt exchange offer was not permissible under the terms of the documents governing the company's debt. The case is frequently referenced in banking law and is used in several law school case books. [2]
Realogy Corporation had several outstanding debts and sought to refinance many of its debt notes by offering to exchange the notes for term loans under a new $500 million term loan facility. The new term loans would be issued under the credit facility and would be secured by a second lien on almost all of Realogy's assets.
Because the new term loans were to be secured by second liens under the credit facility, the proposed exchange offer would have allowed the "Senior Fixed Notes" to effectively become senior to the "Senior Toggle Notes" and the "Senior Subordinated Notes" to "leapfrog" in priority over the Senior Toggle Notes.
The trustee under the indenture sued Realogy on behalf of holders of the Senior Toggle Notes, arguing that the exchange offer breached the indenture. [3]
The court observed that an interpretation of the exclusion to the definition of "Permitted Refinancing Indebtedness" that required nothing more than compliance with the covenants would add no substance to the definition. The exclusion would then be "mere surplusage."
Although the Delaware court did not allow Realogy to pursue its proposed refinancing structure and there is always a risk of litigation where one group of creditors may be adversely affected by a proposed transaction, the court’s reasoning may actually facilitate debt exchange offers by companies. [4]
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equities and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants.
A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. Hypothec is the corresponding term in civil law jurisdictions, albeit with a wider sense, as it also covers non-possessory lien.
This aims to be a complete list of the articles on real estate.
An indenture is a legal contract that reflects or covers a debt or purchase obligation. It specifically refers to two types of practices: in historical usage, an indentured servant status, and in modern usage, it is an instrument used for commercial debt or real estate transaction.
Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.
A creditor or lender is a party that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property and service. The second party is frequently called a debtor or borrower. The first party is called the creditor, which is the lender of property, service, or money.
Refinancing is the replacement of an existing debt obligation with another debt obligation under a different term and interest rate. The terms and conditions of refinancing may vary widely by country, province, or state, based on several economic factors such as inherent risk, projected risk, political stability of a nation, currency stability, banking regulations, borrower's credit worthiness, and credit rating of a nation. In many industrialized nations, common forms of refinancing include primary residence mortgages and car loans.
In the United States, bankruptcy is largely governed by federal law, commonly referred to as the "Bankruptcy Code" ("Code"). The United States Constitution authorizes Congress to enact "uniform Laws on the subject of Bankruptcies throughout the United States". Congress has exercised this authority several times since 1801, including through adoption of the Bankruptcy Reform Act of 1978, as amended, codified in Title 11 of the United States Code and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).
A syndicated loan is one that is provided by a group of lenders and is structured, arranged, and administered by one or several commercial banks or investment banks known as lead arrangers.
A proxy fight, proxy contest or proxy battle is an unfriendly contest for control over an organization. The event usually occurs when a corporation's stockholders develop opposition to some aspect of the corporate governance, often focusing on directorial and management positions. Corporate activists may attempt to persuade shareholders to use their proxy votes to install new management for any of a variety of reasons. Shareholders of a public corporation may appoint an agent to attend shareholder meetings and vote on their behalf. That agent is the shareholder's proxy.
Second mortgages, commonly referred to as junior liens, are loans secured by a property in addition to the primary mortgage. Depending on the time at which the second mortgage is originated, the loan can be structured as either a standalone second mortgage or piggyback second mortgage. Whilst a standalone second mortgage is opened subsequent to the primary loan, those with a piggyback loan structure are originated simultaneously with the primary mortgage. With regard to the method in which funds are withdrawn, second mortgages can be arranged as home equity loans or home equity lines of credit. Home equity loans are granted for the full amount at the time of loan origination in contrast to home equity lines of credit which permit the homeowner access to a predetermined amount which is repaid during the repayment period.
Vicinity Centres ASX: VCX, previously known as Federation Centres and Centro Properties Group, is an Australian Real Estate Investment Trust specialising in ownership and management of Australian shopping centres. As at December 2021, it had stakes in 60 shopping centres. It is headquartered at Chadstone Shopping Centre in Melbourne.
Cash out refinancing occurs when a loan is taken out on property already owned in an amount above the cost of transaction, payoff of existing liens, and related expenses.
A PIK, or payment in kind, is a type of high-risk loan or bond that allows borrowers to pay interest with additional debt, rather than cash. That makes it an expensive, high-risk financing instrument since the size of the debt may increase quickly, leaving lenders with big losses if the borrower is unable to pay back the loan.
In the United States, a mortgage note is a promissory note secured by a specified mortgage loan.
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, was a landmark decision of the Delaware Supreme Court on hostile takeovers.
The Ford Performance Centre, formerly Mastercard Centre For Hockey Excellence, is a hockey facility located in the Etobicoke district of Toronto, Ontario, Canada. It has four ice pads and is the official practice facility of the Toronto Maple Leafs NHL hockey team, and their AHL affiliate the Toronto Marlies. The building also houses offices for Hockey Canada and the Hockey Hall of Fame and was home to the Toronto Furies of the Canadian Women's Hockey League. The land is owned by the Toronto District School Board as 400 Kipling Avenue.
Centerview Partners is an American independent investment banking firm. Centerview operates primarily as an investment banking advisory firm. Centerview has 60 partners and 400 professionals with expertise across a wide range of industries, geographies, transaction structures and sizes.
In structured finance, a tranche is one of a number of related securities offered as part of the same transaction. In the financial sense of the word, each bond is a different slice of the deal's risk. Transaction documentation usually defines the tranches as different "classes" of notes, each identified by letter with different bond credit ratings.
Applicable margin reset (AMR) is a procedure developed to provide an alternative to refinance the interest rate on the outstanding rated classes of collateralized loan obligation (CLO) securities. AMR utilizes a modified Dutch auction procedure to set the new interest rate on each participating class of CLO securities.