The issuer of a note that seeks bankruptcy protection is not intentionally defaulting on its obligation to redeem the note in full and does not automatically trigger an acceleration of the instrument, a U.S. bankruptcy judge for the District of Delaware has ruled.
However, Judge Christopher S. Sontchi, in a 35-page opinion in the March 26 adversary action captioned Delaware Trust v. Energy Future Intermediate Holding, said that in the first phase of an adversary proceeding, an electric utility holding company could not automatically waive default on those obligations and “decelerate” those notes.
