SDNY Bankruptcy Court Allows Unamortized Original Issue Discount As a Claim

The ResCap debtors engaged in prepetition financing transactions pursuant to which approximately $6 billion of old unsecured notes were exchanged for approximately $4 billion in junior secured notes and $500 million in cash. Opinion at 37. The exchange created $1.549 billion of OID amortized over the life of the junior secured notes. Id. at 53. In an adversary proceeding within the ResCap bankruptcy cases, the Holders argued, among other things, that they were oversecured (and therefore entitled to postpetition interest and fees) and sought an allowed adequate protection claim on account of diminution in the value of their prepetition collateral. At issue before the bankruptcy court was whether unamortized OID in the amount of approximately $380 million would be treated as an allowed component of the Holders' claims.

The ResCap debtors and the Committee (collectively, the Plaintiffs) filed a complaint seeking, among other things, to disallow that portion of the Holders' claims attributable to OID. Id. at 53. The Plaintiffs relied on Bankruptcy Code section 502(b)(2) as the basis for disallowing the OID created in the fair market value exchange. Section 502(b)(2) disallows a claim “to the extent that' such claim is for unmatured interest.” 11 U.S.C. 502(b)(2). In response, UMB Bank, N.A., the indenture trustee acting on behalf of the Holders (together with certain of the Holders, the Defendants), moved to dismiss that count and filed pleadings arguing that, even if taxable OID were generated in the exchange, the unamortized OID does not constitute unmatured interest for bankruptcy purposes. See generally id. at 8-9.

The bankruptcy court denied the motion to dismiss and held a subsequent hearing to determine the “matter of first impression” of whether a fair market value exchange generates disallowable OID. See Official Comm. of Unsecured Creditors v. UMB Bank, N.A. (In re Residential Capital, LLC, 495 B.R. 250, 264 (Bankr. S.D.N.Y. 2013).

During the subsequent hearing, the parties did not dispute that the exchange in question, whereby old securities were exchanged for new securities with a reduced principal amount equal to the fair market value of the old securities, was a “fair value” (i.e., “fair market value”) exchange. Opinion at 38. Unlike a face value exchange which modifies the outstanding debt's terms or conditions but does not reduce its principal amount, a fair market value exchange involves the exchange of the principal amount of debt for a lower amount representing its fair market value.

Previous Caselaw Regarding OID and Face Value Exchanges

In LTV Corp. v. Valley Fidelity Bank & Trust Co. (In re Chateaugay Corp.), 961 F.2d 378, 380-83 (2d Cir. 1992), the United States Court of Appeals for the Second Circuit addressed the issue of whether face value exchanges generate OID and, as a consequence, are disallowable in bankruptcy. The LTV Corporation, a steel company that manufactured defense and industrial products, filed for bankruptcy in 1986. In Chateaugay, the holders of the old debentures exchanged $1,000 face amount of new 15% senior notes for each $1,000 face amount of old 13 7/8% debentures. Id. at 379-80. The Second Circuit reversed the bankruptcy court's decision, which the district court had affirmed, and held that “no new OID is created in a face value debt-for-debt exchange in the context of a consensual workout.” Id. at 383.

The Second Circuit based its decision on strong bankruptcy policy grounds in favor of encouraging consensual workouts and “speedy, inexpensive, negotiated resolution of disputes.” Id. at 382. Stressing context over a literal application of the definition of OID, the Second Circuit considered the “strong bankruptcy policy” of promoting such workouts while looking to bankruptcy “as a last resort.” Id. (quoting In re Colonial Ford, Inc., 24 B.R. 1014, 1015-17 (Bankr. D. Utah 1982)). The Second Circuit reasoned that, if a debt for debt exchange were to increase the amount of OID and unamortized OID is disallowable in bankruptcy, creditors would be reluctant to engage in consensual workouts that might provide an alternative to borrowers filing for bankruptcy. Id.

Thus, by holding that “a face value exchange of debt obligations in a consensual workout does not, for purposes of section 502(b)(2), generate new OID,” the Second Circuit sought to promote cooperation among creditors and debtors seeking to avoid bankruptcy. Id. Holding otherwise, the court reasoned, would not only disincentivize creditors from cooperating with distressed borrowers, but also would result in a “windfall both to holdouts who refuse to cooperate and to an issuer that files for bankruptcy subsequent to a debt exchange.” Id. (citing John C. Coffee, Jr. & William A. Klein, Bondholder Coercion: The Problem of Constrained Choice in Debt Tender Offers and Recapitalizations, 58 U.Chi.L.Rev. 1207, 1248-49 & n. 121 (1991) and Marc S. Kirschner, et al., Prepackaged Bankruptcy Plans: The Deleveraging Tool of the '90s in the Wake of OID and Tax Concerns, 21 Seton Hall L.Rev. 643, 644-60) (1991)).

When considering the same issue in the context of a face value debt-for-debt exchange, the United States Court of Appeals for the Fifth Circuit reached the same decision as the Second Circuit. The Fifth Circuit held that the exchange “in the Pengo consensual out-of-court restructuring did not create 'unmatured interest' in the form of original issue discount under section 502(b)(2) of the Bankruptcy Code.” In re Pengo Industries, Inc., 962 F.2d 543, 549 (5th Cir. 1992). Employing similar reasoning as in Chateaugay, the Fifth Circuit refused to disallow unamortized OID in bankruptcy because doing so would penalize cooperating creditors by lowering their claims while also rewarding those who did not partake in the workout by allowing their full claim. Id. at 545-551.

While the Second and Fifth Circuits held in Chateaugay and Pengo Industries, respectively, that a face value exchange does not generate new OID for the purposes of claim allowance under the Bankruptcy Code, neither court decided the same question in the context of a fair market value exchange. Chateaugay contained dicta suggesting that its ruling might not extend to a fair market value exchange. Chateaugay, 961 F.2d at 382 (“The bankruptcy court's decision [finding unallowable OID] might make sense in the context of a fair market value exchange, where the corporation's overall debt obligations are reduced.”). The Pengo Industries court, on the other hand, specifically stated that it “express[es] no opinion as to whether a fair market value exchange creates OID not allowed under ' 502(b)(2).” Pengo Industries, 962 F.2d at 550.

The ResCap Parties' Arguments

In the ResCap bankruptcy cases, the Plaintiffs urged the bankruptcy court to adopt “a straightforward application” of section 502(b)(2) of the Bankruptcy Code and disallow the unamortized OID generated pursuant to the fair market value exchange. Plaintiffs' Phase I Post-Trial Brief, 9 (Case No. 13-01277) [Docket No. 186]. The Plaintiffs asked the bankruptcy court not to extend the “narrow policy exception” applicable to face value exchanges as articulated by the Second Circuit in Chateaugay “particularly ' where the [e]xchange was so clearly beneficial to the exchanging holders of the old notes.” Id. Unlike the circumstances of Chateaugay, the Plaintiffs argued, the disallowance of OID in the ResCap exchange “would not lead to an absurd result.” Id. at 11. Instead, the Plaintiffs argued, disallowance of OID “would merely prevent the [Holders] from receiving an unjustified windfall by collecting interest not yet earned at the Petition Date.” Id.

More generally, the Plaintiffs argued that a fair market value exchange, which involves a reduction of the notes' face amount, offered the Holders incentives to pursue the exchange, such as improved bankruptcy treatment. Id. at 11-12. The existence of such incentives, the Plaintiffs argued, ensured that “participation in fair market value exchanges will not be unduly chilled if the OID is disallowed.” Id. at 11.

The Defendants, on the other hand, argued that the Chateaugay reasoning favoring speedy negotiations and consensual workouts supported the allowance of the Holders' claims in full. Post-Trial Memorandum of Law of the Ad Hoc Group of Junior Secured Noteholders and UMB Bank, N.A., 5-7 (Case No. 13-01343) [Docket No. 138]. Disallowance of OID in a fair value exchange, the Defendants argued, “would have a serious chilling effect on out-of-court restructurings,” which in turn would contravene the policy favoring consensual workouts as articulated by the Second Circuit in Chateaugay. Id. at 7. In addition, the Defendants argued that disallowance of OID would provide a windfall to creditors not participating in the exchange. Id.

The Defendants maintained that the policy arguments upon which the Second Circuit relied in Chateaguay in the context of face value exchanges “apply with equal ' if not greater ' force to fair value exchanges.” Id. at 8; see also id. at 9 (“there is no commercial or business justification, or valid theory of corporate finance, to justify treating claims generated by face value and fair value exchanges differently in bankruptcy.”) Moreover, the Defendants asserted that, if ResCap noteholders had known or feared that their bankruptcy claim would be reduced as a result of disallowable OID, fewer would have participated in the exchange and ResCap might not have avoided bankruptcy in 2008. Id. at 10-12.

The Bankruptcy Court Opinion Allowing the OID

While acknowledging that Chateaugay specifically left open the possibility that different rules apply to fair market value exchanges, the bankruptcy court held that “despite the differences between face value and fair value debt-exchanges, the same rule on disallowance of OID should apply in both circumstances.” Opinion at 587.

In its ruling on the OID issue, the bankruptcy court determined that there was not sufficient evidence before it to distinguish OID generated in a fair value exchanges from OID generated pursuant to a face value exchange. As a result, the bankruptcy court found that Chateaugay is controlling regarding the fair value exchange at issue in ResCap. Id. The bankruptcy court noted that issuers can use the same features in structuring both face value and fair market value exchanges. Id. at 588 (referencing, among other things, granting collateral, interest rate, maturity date, payment priorities, guarantees, etc.). The Bankruptcy Court then listed the following elements as applicable to both face value and fair market value exchanges:

• The market value of the old exchanged debt is likely depressed in either situation;
• OID is created for tax purposes in both exchanges;
• There are concessions and incentives in either situation; and
• Both exchanges offer companies the opportunity to restructure out-of-court, avoiding the time and costs of bankruptcy.

Id.

The bankruptcy court also was persuaded that, should OID created in fair market value exchanges be disallowed, out-of-court debt restructurings would be more difficult to accomplish and more bankruptcy filings would result. Id. at 41. In particular, the bankruptcy court discussed the concern that, should the court not extend Chateaugay, “bondholders could simply reject fair value exchanges altogether.” Id.

The bankruptcy court also cited Chateaugay and other precedent for the proposition that how a transaction is treated for tax purposes is not dispositive of its treatment for bankruptcy purposes. Id. at 55-56. Finally, the bankruptcy court recognized that the Holders would receive a greater recovery than the noteholders who did not participate in the exchange, even if the exchange generated disallowable OID. Id. at 579. Nevertheless, the bankruptcy court stated that the outcome of whether a transaction creates disallowable OID should not hinge on whether a party “got a 'good deal' in bankruptcy.” Id.

Impact of the Opinion

The Opinion is the first of its kind to find that unamortized OID generated in a fair market value exchange is allowable as a bankruptcy claim. As a result, the Opinion has significant and immediate implications for investors holding notes with OID generated in fair market value exchanges, e.g., Caesars Entertainment, Energy Future Holdings and LBI Media, among others. In fact, we understand that within hours of the Opinion being published, pricing jumped on Caesars Entertainment's 10% second-lien notes due 2018 that include an OID portion.

Note, Dechert LLP represents The Bank of New York Mellon and The Bank of New York Mellon Trust Company, N.A. (collectively, “The Bank of New York Mellon”) in its capacity, among other things, as the indenture trustee for certain of the residential mortgage-backed securitization trusts that have asserted claims in the Chapter 11 bankruptcy cases of Residential Capital LLC and its affiliates (collectively, “ResCap”). The Bank of New York Mellon is also a member of the Official Committee of Unsecured Creditors (the “Committee”) appointed in the cases. In light of Dechert's role in the ResCap bankruptcy cases, this article is objective in nature and offers no opinion on the decision discussed.

Michael J. Sage ([email protected]), a partner and co-chair of Dechert LLP's bankruptcy, business restructuring and reorganization group, is a member of this newsletter's Board of Editors. James O. Moore'([email protected]) is Of Counsel at Morgan, Lewis & Bockius, LLP, New York. The authors gratefully acknowledge' Negisa Balluku for her assistance in the preparation of this article. Any views expressed in this article are those of the authors and not of either of their firms or'their clients.

The Bankruptcy Court for the Southern District of New York (the bankruptcy court) recently held that unamortized interest associated with original issue discount (OID) originating from a fair market value exchange constitutes an allowed bankruptcy claim. While there was caselaw both in the Second and Fifth Circuits holding that a face value exchange does not generate new OID for the purposes of claim allowance under the Bankruptcy Code, until 2013, no court had yet decided the same question in the context of a fair market value exchange. When the issue squarely arose in the ResCap bankruptcy cases, the bankruptcy court considered the question as a matter of first impression and issued an opinion allowing the unamortized interest associated with OID claimed by ResCap's junior secured noteholders (the Holders). See Official Comm. of Unsecured Creditors v. UMB Bank (In re Residential Capital, LLC), 501 B.R. 549 (Bankr. S.D.N.Y. 2013) (the Opinion).

The OID ruling is just one component of the Opinion, which more generally established that the Holders' claims are undersecured and thus not entitled to postpetition interest and fees. This article, though, focuses on only the OID ruling aspect of the Opinion because it will have far reaching implications, especially in the pricing of other OID notes that are the product of fair market value exchanges.

Facts and Background

The ResCap debtors engaged in prepetition financing transactions pursuant to which approximately $6 billion of old unsecured notes were exchanged for approximately $4 billion in junior secured notes and $500 million in cash. Opinion at 37. The exchange created $1.549 billion of OID amortized over the life of the junior secured notes. Id. at 53. In an adversary proceeding within the ResCap bankruptcy cases, the Holders argued, among other things, that they were oversecured (and therefore entitled to postpetition interest and fees) and sought an allowed adequate protection claim on account of diminution in the value of their prepetition collateral. At issue before the bankruptcy court was whether unamortized OID in the amount of approximately $380 million would be treated as an allowed component of the Holders' claims.

The ResCap debtors and the Committee (collectively, the Plaintiffs) filed a complaint seeking, among other things, to disallow that portion of the Holders' claims attributable to OID. Id. at 53. The Plaintiffs relied on Bankruptcy Code section 502(b)(2) as the basis for disallowing the OID created in the fair market value exchange. Section 502(b)(2) disallows a claim “to the extent that' such claim is for unmatured interest.” 11 U.S.C. 502(b)(2). In response, UMB Bank, N.A., the indenture trustee acting on behalf of the Holders (together with certain of the Holders, the Defendants), moved to dismiss that count and filed pleadings arguing that, even if taxable OID were generated in the exchange, the unamortized OID does not constitute unmatured interest for bankruptcy purposes. See generally id. at 8-9.

The bankruptcy court denied the motion to dismiss and held a subsequent hearing to determine the “matter of first impression” of whether a fair market value exchange generates disallowable OID. See Official Comm. of Unsecured Creditors v. UMB Bank, N.A. (In re Residential Capital, LLC, 495 B.R. 250, 264 (Bankr. S.D.N.Y. 2013).

During the subsequent hearing, the parties did not dispute that the exchange in question, whereby old securities were exchanged for new securities with a reduced principal amount equal to the fair market value of the old securities, was a “fair value” (i.e., “fair market value”) exchange. Opinion at 38. Unlike a face value exchange which modifies the outstanding debt's terms or conditions but does not reduce its principal amount, a fair market value exchange involves the exchange of the principal amount of debt for a lower amount representing its fair market value.

Previous Caselaw Regarding OID and Face Value Exchanges

In LTV Corp. v. Valley Fidelity Bank & Trust Co. (In re Chateaugay Corp.), 961 F.2d 378, 380-83 (2d Cir. 1992), the United States Court of Appeals for the Second Circuit addressed the issue of whether face value exchanges generate OID and, as a consequence, are disallowable in bankruptcy. The LTV Corporation, a steel company that manufactured defense and industrial products, filed for bankruptcy in 1986. In Chateaugay, the holders of the old debentures exchanged $1,000 face amount of new 15% senior notes for each $1,000 face amount of old 13 7/8% debentures. Id. at 379-80. The Second Circuit reversed the bankruptcy court's decision, which the district court had affirmed, and held that “no new OID is created in a face value debt-for-debt exchange in the context of a consensual workout.” Id. at 383.

The Second Circuit based its decision on strong bankruptcy policy grounds in favor of encouraging consensual workouts and “speedy, inexpensive, negotiated resolution of disputes.” Id. at 382. Stressing context over a literal application of the definition of OID, the Second Circuit considered the “strong bankruptcy policy” of promoting such workouts while looking to bankruptcy “as a last resort.” Id. (quoting In re Colonial Ford, Inc., 24 B.R. 1014, 1015-17 (Bankr. D. Utah 1982)). The Second Circuit reasoned that, if a debt for debt exchange were to increase the amount of OID and unamortized OID is disallowable in bankruptcy, creditors would be reluctant to engage in consensual workouts that might provide an alternative to borrowers filing for bankruptcy. Id.

Thus, by holding that “a face value exchange of debt obligations in a consensual workout does not, for purposes of section 502(b)(2), generate new OID,” the Second Circuit sought to promote cooperation among creditors and debtors seeking to avoid bankruptcy. Id. Holding otherwise, the court reasoned, would not only disincentivize creditors from cooperating with distressed borrowers, but also would result in a “windfall both to holdouts who refuse to cooperate and to an issuer that files for bankruptcy subsequent to a debt exchange.” Id. (citing John C. Coffee, Jr. & William A. Klein, Bondholder Coercion: The Problem of Constrained Choice in Debt Tender Offers and Recapitalizations, 58 U.Chi.L.Rev. 1207, 1248-49 & n. 121 (1991) and Marc S. Kirschner, et al., Prepackaged Bankruptcy Plans: The Deleveraging Tool of the '90s in the Wake of OID and Tax Concerns, 21 Seton Hall L.Rev. 643, 644-60) (1991)).

When considering the same issue in the context of a face value debt-for-debt exchange, the United States Court of Appeals for the Fifth Circuit reached the same decision as the Second Circuit. The Fifth Circuit held that the exchange “in the Pengo consensual out-of-court restructuring did not create 'unmatured interest' in the form of original issue discount under section 502(b)(2) of the Bankruptcy Code.” In re Pengo Industries, Inc., 962 F.2d 543, 549 (5th Cir. 1992). Employing similar reasoning as in Chateaugay, the Fifth Circuit refused to disallow unamortized OID in bankruptcy because doing so would penalize cooperating creditors by lowering their claims while also rewarding those who did not partake in the workout by allowing their full claim. Id. at 545-551.

While the Second and Fifth Circuits held in Chateaugay and Pengo Industries, respectively, that a face value exchange does not generate new OID for the purposes of claim allowance under the Bankruptcy Code, neither court decided the same question in the context of a fair market value exchange. Chateaugay contained dicta suggesting that its ruling might not extend to a fair market value exchange. Chateaugay, 961 F.2d at 382 (“The bankruptcy court's decision [finding unallowable OID] might make sense in the context of a fair market value exchange, where the corporation's overall debt obligations are reduced.”). The Pengo Industries court, on the other hand, specifically stated that it “express[es] no opinion as to whether a fair market value exchange creates OID not allowed under ' 502(b)(2).” Pengo Industries, 962 F.2d at 550.

The ResCap Parties' Arguments

In the ResCap bankruptcy cases, the Plaintiffs urged the bankruptcy court to adopt “a straightforward application” of section 502(b)(2) of the Bankruptcy Code and disallow the unamortized OID generated pursuant to the fair market value exchange. Plaintiffs' Phase I Post-Trial Brief, 9 (Case No. 13-01277) [Docket No. 186]. The Plaintiffs asked the bankruptcy court not to extend the “narrow policy exception” applicable to face value exchanges as articulated by the Second Circuit in Chateaugay “particularly ' where the [e]xchange was so clearly beneficial to the exchanging holders of the old notes.” Id. Unlike the circumstances of Chateaugay, the Plaintiffs argued, the disallowance of OID in the ResCap exchange “would not lead to an absurd result.” Id. at 11. Instead, the Plaintiffs argued, disallowance of OID “would merely prevent the [Holders] from receiving an unjustified windfall by collecting interest not yet earned at the Petition Date.” Id.

More generally, the Plaintiffs argued that a fair market value exchange, which involves a reduction of the notes' face amount, offered the Holders incentives to pursue the exchange, such as improved bankruptcy treatment. Id. at 11-12. The existence of such incentives, the Plaintiffs argued, ensured that “participation in fair market value exchanges will not be unduly chilled if the OID is disallowed.” Id. at 11.

The Defendants, on the other hand, argued that the Chateaugay reasoning favoring speedy negotiations and consensual workouts supported the allowance of the Holders' claims in full. Post-Trial Memorandum of Law of the Ad Hoc Group of Junior Secured Noteholders and UMB Bank, N.A., 5-7 (Case No. 13-01343) [Docket No. 138]. Disallowance of OID in a fair value exchange, the Defendants argued, “would have a serious chilling effect on out-of-court restructurings,” which in turn would contravene the policy favoring consensual workouts as articulated by the Second Circuit in Chateaugay. Id. at 7. In addition, the Defendants argued that disallowance of OID would provide a windfall to creditors not participating in the exchange. Id.

The Defendants maintained that the policy arguments upon which the Second Circuit relied in Chateaguay in the context of face value exchanges “apply with equal ' if not greater ' force to fair value exchanges.” Id. at 8; see also id. at 9 (“there is no commercial or business justification, or valid theory of corporate finance, to justify treating claims generated by face value and fair value exchanges differently in bankruptcy.”) Moreover, the Defendants asserted that, if ResCap noteholders had known or feared that their bankruptcy claim would be reduced as a result of disallowable OID, fewer would have participated in the exchange and ResCap might not have avoided bankruptcy in 2008. Id. at 10-12.

The Bankruptcy Court Opinion Allowing the OID

While acknowledging that Chateaugay specifically left open the possibility that different rules apply to fair market value exchanges, the bankruptcy court held that “despite the differences between face value and fair value debt-exchanges, the same rule on disallowance of OID should apply in both circumstances.” Opinion at 587.

In its ruling on the OID issue, the bankruptcy court determined that there was not sufficient evidence before it to distinguish OID generated in a fair value exchanges from OID generated pursuant to a face value exchange. As a result, the bankruptcy court found that Chateaugay is controlling regarding the fair value exchange at issue in ResCap. Id. The bankruptcy court noted that issuers can use the same features in structuring both face value and fair market value exchanges. Id. at 588 (referencing, among other things, granting collateral, interest rate, maturity date, payment priorities, guarantees, etc.). The Bankruptcy Court then listed the following elements as applicable to both face value and fair market value exchanges:

• The market value of the old exchanged debt is likely depressed in either situation;
• OID is created for tax purposes in both exchanges;
• There are concessions and incentives in either situation; and
• Both exchanges offer companies the opportunity to restructure out-of-court, avoiding the time and costs of bankruptcy.

Id.

The bankruptcy court also was persuaded that, should OID created in fair market value exchanges be disallowed, out-of-court debt restructurings would be more difficult to accomplish and more bankruptcy filings would result. Id. at 41. In particular, the bankruptcy court discussed the concern that, should the court not extend Chateaugay, “bondholders could simply reject fair value exchanges altogether.” Id.

The bankruptcy court also cited Chateaugay and other precedent for the proposition that how a transaction is treated for tax purposes is not dispositive of its treatment for bankruptcy purposes. Id. at 55-56. Finally, the bankruptcy court recognized that the Holders would receive a greater recovery than the noteholders who did not participate in the exchange, even if the exchange generated disallowable OID. Id. at 579. Nevertheless, the bankruptcy court stated that the outcome of whether a transaction creates disallowable OID should not hinge on whether a party “got a 'good deal' in bankruptcy.” Id.

Impact of the Opinion

The Opinion is the first of its kind to find that unamortized OID generated in a fair market value exchange is allowable as a bankruptcy claim. As a result, the Opinion has significant and immediate implications for investors holding notes with OID generated in fair market value exchanges, e.g., Caesars Entertainment, Energy Future Holdings and LBI Media, among others. In fact, we understand that within hours of the Opinion being published, pricing jumped on Caesars Entertainment's 10% second-lien notes due 2018 that include an OID portion.

Note, Dechert LLP represents The Bank of New York Mellon and The Bank of New York Mellon Trust Company, N.A. (collectively, “The Bank of New York Mellon”) in its capacity, among other things, as the indenture trustee for certain of the residential mortgage-backed securitization trusts that have asserted claims in the Chapter 11 bankruptcy cases of Residential Capital LLC and its affiliates (collectively, “ResCap”). The Bank of New York Mellon is also a member of the Official Committee of Unsecured Creditors (the “Committee”) appointed in the cases. In light of Dechert's role in the ResCap bankruptcy cases, this article is objective in nature and offers no opinion on the decision discussed.

Michael J. Sage ([email protected]), a partner and co-chair of Dechert LLP's bankruptcy, business restructuring and reorganization group, is a member of this newsletter's Board of Editors. James O. Moore'([email protected]) is Of Counsel at Morgan, Lewis & Bockius, LLP, New York. The authors gratefully acknowledge' Negisa Balluku for her assistance in the preparation of this article. Any views expressed in this article are those of the authors and not of either of their firms or'their clients.