Disclosure & Finality—The Real Lessons Behind the Third Circuit’s Affirmation of the Bankruptcy Court’s Reconsideration and Denial of a $275 Million Termination Payment
On September 13, 2018, the Court of Appeals for the Third Circuit in In re: Energy Future Holdings Corp. affirmed the Bankruptcy Court’s decision to reconsider and reverse its approval of a $275 million termination fee due pursuant to its bankruptcy court-approved Merger Agreement with EFH. At first blush, the decision could be characterized as an inappropriate second-guessing of a crystallized break-up fee authorized under the Third Circuit’s O’Brien test. Under closer review, however, that is not the case or import of the decision.