On December 31, 2024, the U.S Court of Appeals for the Fifth Circuit issued a unanimous decision reversing the bankruptcy court’s ruling that allowed an uptier transaction entered into by Serta Simmons Bedding, LLC (“Serta Simmons”) in 2020 (the “2020 Uptier”). The appellate court also held that plan provisions requiring the indemnification of the lenders … Continue Reading
In March 2022, the International Monetary Fund (the “IMF”) assessed Sri Lanka’s public debt to be unsustainable after the country entered the pandemic with thin reserve buffers, high debt levels, and no fiscal space. The IMF’s determination prompted Sri Lanka to begin restructuring its debt the following month. As part of that process, Sri Lanka … Continue Reading
In a recent decision that will add some welcomed clarity to the imposition of Part A1 moratoriums over companies which have been presented with a winding-up petition, the High Court has reflected on the requirements of section A4 of the Insolvency Act 1986 (the “Act”) and confirmed the test that must be satisfied in order … Continue Reading
The implementation, just over a year ago, of Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on Preventive Restructuring Frameworks, has meant a real Copernican shift in Spanish insolvency law. In particular in the field of pre-bankruptcy law, as it has established a new model based on Chapter … Continue Reading
The confluence of the COVID-19 pandemic, high inflation, and increased borrowing costs culminated in countries incurring record levels of debt.[1] Despite this global debt crisis, there is currently no comprehensive set of rules or body of law to govern the restructuring of sovereign debt. Instead, when a sovereign restructures its debt, it is usually guided … Continue Reading
In its battle to control and reduce the rate of inflation, the Bank of England has increased interest rates for a 13th consecutive time. Already at its highest level for nearly 15 years, rising interest rates are continuing to apply pressure on finances both at home and in businesses. Despite the Bank’s efforts, although slightly … Continue Reading
The increase in bankruptcy filings that restructuring professionals have been expecting is now arriving. With rising inflation, increased interest rates, tightening credit markets, labor shortages and supply chain disruptions, we are starting to see a dramatic increase in filings. Last week the American Bankruptcy Institute noted that commercial Chapter 11 filings increased 105% in May … Continue Reading
The uncertainty in markets continues as a result of a number of issues, including monetary policy, supply chain challenges, labour market constraints, increased creditor activities and a balance sheet reckoning post-COVID-19 where government support propped up unworthy businesses. That potentially debilitating economic cocktail is compounded by the fact that all entities have a debt ceiling, … Continue Reading
Companies entering external administration often have outstanding tax filings. The external controllers appointed conduct initial and ongoing reviews as to those filings. Then, in time, they either bring the filings up to date or engage the tax office in order to revisit historical filings. Aside from being legally required to address a company’s filings, external … Continue Reading
The recent case of Re Lloyds British Testing Ltd [2023] is a reminder not to forget that in the right circumstances a director’s occupational pension pot might be a valuable source of funds that an Insolvency Practitioner (IP) can access to recover an unpaid debt due from a former director. Background In this case, an … Continue Reading
External administrators in Australia are faced with immediate challenges from the date of their appointment. Those challenges often come in the form of uncertainty around contractual positions, conflicting interests between key stakeholders and the administrators’ rights and obligations. Fortunately, the Insolvency Practice Schedule, which now forms a critical part of Australia’s Corporations Act, gives administrators … Continue Reading
In January, we wrote about Highland Capital Management, L.P. and the reorganized debtor’s filing of a petition for a writ of certiorari, by which the reorganized debtor asked the Supreme Court to consider whether section 524(e) of the Bankruptcy Code prohibits non-debtor exculpations. Now for something completely different. Earlier this month, the Bankruptcy Court for the … Continue Reading
A recent order from the United States Bankruptcy Court for the Southern District of New York puts to test the theory that “it is better to ask for forgiveness than permission.” After a lengthy dispute in the bankruptcy cases of Arcapita Bank B.S.C.(c) and its affiliates (the “Debtors”), the court held Bahrain Islamic Bank (“BisB”) … Continue Reading
The new year has seen a rapid pace being set in terms of anticipated and actual legislative, regulatory and common law changes across Australia’s restructuring and insolvency regimes. In our latest insight we flag potential changes to not only the legislative regime but also the regulatory framework and consider the outlook for key stakeholders.… Continue Reading
Insolvency practitioners (IPs) often occupy quasi-judicial offices which, among other things, require them to, assess and adjudicate on competing claims, take coercive and enforcement actions and complete potentially contentious transactions. They must discharge their legal and equitable duties whilst maintaining objectivity and, whilst recognising and appropriately balancing the interests of a diverse range of stakeholders. … Continue Reading
Economic, trading and supply chain uncertainties persist and are particularly pronounced in some sectors including infrastructure and construction where sub-contractors often feel significant pressure points. In our latest Australian insight, following the Federal Court rejecting the liquidators’ proprietary interest claims in the proceeds of performance bonds and upholding the head-contractor’s statutory set-off rights, we consider … Continue Reading
The High Court in Australia has determined that territorial limitations do not curtail group member participation rights in class actions. Read what this decision means in our latest Insight.… Continue Reading
In a continuation of our Australian litigation funding series, Masi Zaki and Kate Spratt examine the recently announced reforms by the Australian government and the welcome relief for litigation funders, their investors and proponents in this insight.… Continue Reading
In this alert Masi Zaki and Kate Spratt considers the new powers that Australian market regulators will soon have to conduct virtual investigations and examinations, and how the proposed new laws mean that Regulator enquiries and examinations are likely to become more prevalent.… Continue Reading
Brought in with the intention of protecting viable businesses from eviction or other enforcement measures in relation to rental arrears accrued as a result of COVID-19 lockdown restrictions, the arbitration scheme (the “Scheme”) provided for under the Commercial Rents (Coronavirus) Act 2022 (the “Act”) has now ended. Its expiry sees the lifting of all remaining … Continue Reading
As global economies continue to experience uncertainties, it is likely that financial service providers and their dealings with consumers and small businesses will come under the microscope. Masi Zaki and Kate Spratt consider those issues from the perspective of of Australian Financial Service Licence holders in our latest alert.… Continue Reading
The Court of Appeal recently handed down its judgment in the Hoey case. The case is noteworthy because it helps illustrate the extent of HMRC’s powers to collect tax by shifting compliance obligations from one person to another. As can be readily appreciated, this could be particularly of note for directors of companies that have … Continue Reading
In the case of Caversham Finance Limited (in administration) [2022] EWHC 789, the court considered whether errors in a notice to creditors seeking consent to extend an administration made the extension invalid. This case is important as it shows the court’s approach to omission of prescribed information in notices to creditors. The information that was … Continue Reading
