Pryor Cashman LLP has been retained as co-counsel to Wilmington Savings Fund Society, FSB in a litigation filed on May 22, 2015 before Vice Chancellor J. Travis Laster in the Delaware Court of Chancery against Foresight Energy LLC.  Seth H. Lieberman and Patrick Sibley, members of the firm’s Bankruptcy, Reorganization and Creditors’ Rights group, are leading the representation on Pryor Cashman’s behalf.

In 2013, Foresight Energy LLC and Foresight Energy Finance Corp. issued bonds worth approximately $600 million for which Wilmington Savings Fund Society, FSB now acts as indenture trustee.  The indenture contains a “change of control provision” stating that if a third party acquires control of the company, as is often the case in an acquisition, the new controlling party must repurchase the bonds at a premium.

When Murray Energy acquired Foresight on April 16, 2015, it created one of the leading coal companies in the world controlling over nine billion tons of coal reserves.  That acquisition also allegedly triggered the change of control provision in the indenture.  Wilmington Savings Fund Society, FSB is seeking a declaration that the deal triggered the change of control provision and damages for breach of contract.

For Lieberman and Sibley, this engagement is the latest in a long line of work on behalf of indenture trustees.  They represented an indenture trustee to more than $155 million in unsecured notes in the AMR bankruptcy—the last of the remaining legacy airlines in the U.S. to file for bankruptcy.  They also represented an indenture trustee to the second lien notes in the Momentive bankruptcy, which was one of the largest and widely reported bankruptcies in 2014.  And most recently, they were retained to represent an indenture trustee for $479 million in senior unsecured notes in connection with the Caesars Entertainment Operating Company bankruptcy, which is widely regarded as one of the largest modern day bankruptcies.