Delaware Court of Chancery Rules in Favor of Simpson Thacher Client Petrohawk Energy Corp. in Bond Indenture Suit Arising from Merger
On August 1st, the Delaware Court of Chancery issued a noteworthy decision in Law Debenture Trust Company of New York v. Petrohawk Energy Corp., granting summary judgment in favor of Simpson Thacher client Petrohawk and dismissing all claims asserted by an indenture trustee. The Court held that noteholder rights are created and limited by the indenture governing the debt, and that issuers of corporate debt permissibly may structure transactions to purposely avoid triggering mandatory debt redemption provisions. The attached summarizes the Court's decision and its impact on issuers of corporate debt.