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In re La Paloma Generating Co.

In re La Paloma Generating Co.

United States Bankruptcy Court for the District of Delaware

December 27, 2018, Decided

Chapter 11, Case No.: 16-12700 (CSS) (Jointly Administered)

Opinion

 [*467] Related Docket Nos. 695 and 739

OPINION1

Sontchi, CJ. /s/ Sontchi

 [*468]  INTRODUCTION2

Before the Court is the (i) Ad Hoc Group of Second Lien Creditors' (the "Second-Lien Group") Motion to Enforce Intercreditor Agreement3 (the "Second-Lien Group Motion"), and (ii) LNV Corporation's ("LNV" or "First-Lien Creditor") Motion of LNV Corporation to Enforce Intercreditor Agreement (the "LNV Motion," and together with the 2L Group [**2]  Motion, the "Motions").4 The Motions seek to define the rights of both the Second-Lien Group and LNV to distributions under the Plan, which are currently being held by the Collateral Agent. Based on the language of the Intercreditor Agreement, the Court finds that the First-Lien Creditors are to be paid-in-full prior to the Second-Lien Creditors receiving payment based on the Second-Lien Claim. As a result, the Court will grant the LNV Motion (D.I. 739) and deny the Second-Lien Group Motion (D.I. 695). Creditors receiving payment based on the Second-Lien Claim. As a result, the Court will grant the LNV Motion (D.I. 739) and deny the Second-Lien Group Motion (D.I. 695).

JURISDICTION

The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 157 and 1334. Venue in the United States Bankruptcy Court for the District of Delaware is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B), (E) and (K). The Court has the judicial power to enter a final order.

BACKGROUND

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595 B.R. 466 *; 2018 Bankr. LEXIS 4042 **; 66 Bankr. Ct. Dec. 163; 2018 WL 6822271

In re LA PALOMA GENERATING COMPANY, et al., Debtors.

Subsequent History: Affirmed by, Motion denied by, Motion denied by, As moot Ad Hoc Grp. of Second Lien Creditors v. LNV Corp. (In re La Paloma Generating Co. LLC), 2019 U.S. Dist. LEXIS 162673 (D. Del., Sept. 24, 2019)

CORE TERMS

Intercreditor, Collateral, Lenders, Obligations, remedies, distributions, parties, liens, filing proof, proceeds, senior, administrative agent, subordination, exercise of rights, second lien, Settlement, asserts, rights, contravention, first lien, Reaffirmation

Bankruptcy Law, Types of Claims, Unsecured Priority Claims, Subordination, Contracts Law, Contract Interpretation, Intent, Contract Interpretation