Firm Memoranda

BONY v. Liberty Media: Delaware Supreme Court Finds that a "Disaggregation Strategy" Does Not Constitute a Sale of "Substantially All" of a Company's Assets for Indenture Covenant Purposes

Date: 09/30/11

On a matter of first impression, the Delaware Supreme Court applied New York law to affirm that a series of individual decisions, made over several years, to transfer a large portion of company assets did not constitute a disposition of "substantially all" of the company's assets, and thus did not violate the successor obligor provision contained in an issuer's debt indenture (the "Indenture"). The September 21, 2011 decision, Bank of New York Mellon Trust Company, N.A. v. Liberty Media Corp., cleared the way for Liberty Media Corporation ("Liberty")to split off two of its businesses into a new, publicly traded company without triggering an event of default under the Indenture.

BONY v Liberty Media - DE Supreme Court Finds 'Disaggregation Strategy' Does Not Constitute Sale of 'Substantially All' of a Companys Assets.pdf (pdf | 125.65 KB )