In a victory for minority noteholders opposing an out-of-court restructuring of their distressed issuer, New York’s highest court ruled last week that a holder’s right to receive or sue for payment on its notes survived an exercise of statutory remedies by the trustee, conducted at the direction of a noteholder majority, that would have cancelled the holder’s notes without its consent and replaced them with equity securities. The decision represents an important development in an area of law concerning when minority holders have the right to hold up an out-of-court, majority-approved restructuring.
October 28, 2020
