Willkie Successfully Defends Appeal of Momentive’s Bankruptcy Plan Confirmation Order

May 6, 2015

District Court for the Southern District of New York affirms Bankruptcy Court’s order confirming chapter 11 plan of reorganization.

On May 5, Willkie obtained an appellate victory for Momentive Performance Materials Inc. when the Honorable Vincent L. Briccetti of the District Court for the Southern District of New York issued an opinion affirming the Bankruptcy Court’s September 11, 2014 order confirming Momentive’s chapter 11 plan of reorganization.

In August 2014, the Bankruptcy Court held a heavily-contested one-week trial with respect to the confirmation of Momentive’s prenegotiated Plan of Reorganization.  On August 26, 2014, Bankruptcy Judge Robert D. Drain ruled in favor of Momentive on every contested point of its prenegotiated chapter 11 plan of reorganization, which had the support of approximately 90% of its second lien noteholders.  The restructuring resulted in the elimination of more than $3 billion of debt from Momentive’s balance sheet.

Indenture trustees for three of Momentive’s debt issuances appealed Judge Drain’s decision to the District Court for the Southern District of New York, arguing that the Bankruptcy Court incorrectly ruled in favor of Momentive on each contested issue.  Willkie submitted appellate briefs on the merits of the various appeals, as well as motions to dismiss the appeals as equitably moot, as the chapter 11 plan was consummated pursuant to its terms before the appeals were determined by the District Court. Judge Briccetti’s opinion concurred with the reasoning of Momentive and Judge Drain with respect to each contested issue.

The appellate case was handled by an interdepartmental bankruptcy and litigation team, primarily consisting of partners Matthew Feldman, Rachel Strickland, Joseph Baio, Roger Netzer and James Dugan and associates Jennifer Hardy, Dan Kozusko, Ji Kim, Andrew Mordkoff, Christopher Koenig, Stephen Mouritsen and William O’Brien.