Bankruptcy Judge Burton Lifland
In Chapter 11 proceedings, bankruptcy court was confronted with an "insured unitranche" under which all secured creditors' claims were secured by the same lien, through the same trustee and collateral agent, on terms set out in pre-petition contracts forming the sole bases for the creditors' rights. Those rights were curtailed as part of a quid pro quo with Syncora Guarantee Inc., the insurer securing the creditors' claims. The court held that an ad hoc committee comprising holders of $162.5 million in principal of senior secured bonds issued by debtor American Roads LLC lacked standing to participate in the subject proceedings. It denied the bondholders' motion to adjourn the confirmation hearing. Relevant caselaw and contractual provisions supported a finding that they waived their right to appear. Despite "no action" clauses in relevant finance documents, the bondholders sought to enforce individual rights, remedies and actions contrary to their bargained-for agreements delegating and waiving such rights in favor of Syncora. Also, neither the discharge of the subject bonds nor Syncora's vote in favor of the subject plan was a supplemental indenture requiring bondholder consent pursuant to section 1002 of the base indenture.
