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Directors’ Duties and Covid-19 – a view from the UK

By Devinder Singh and Leyla Parvizi on Posted in Cross Border, EU, UK, US
Given the current pressure all businesses face dealing with the effect of Covid-19, it is important that directors understand what their duties are in respect of insolvent companies or companies that are at risk of heading towards insolvency. In this blog we briefly remind directors what their duties are, the potential claims that could be … Continue Reading

Restructuring Protections In A Time Of Coronavirus

By Karol Denniston, Peter Morrison and Sarah Rathke on Posted in US
What do businesses and their lenders/investors need to do to minimize loss and to maximize long-term financial stability in this volatile and unprecedented environment? Our global supply chain and R&I teams have produced a recent article that focuses on: Preparing new projections. Developing new financial and operating plans. What to do if maintaining existing financing … Continue Reading

How to manage business risk posed by Covid-19: self-assessment tool

By Rachael Markham on Posted in Australia, Cross Border, UK, US
Squire Patton Boggs is working hard to support clients to navigate legal issues and manage risk posed by Covid-19. We have created an online tool for businesses to self assess their contingency arrangements. The self-assessment tool will take a maximum of 15 minutes to complete. Within 24 hours, you will be sent a summary, which will map … Continue Reading

Managing business risk as the UK announces it is moving into the delay phase

By Rachael Markham and John Alderton on Posted in Cross Border, EU, UK, US
Yesterday, following a meeting of the Cobra committee the Government announced that the UK has moved into the “delay” phase of its plan aimed at tackling the coronavirus outbreak. For businesses the main impact will be operational given that anyone who shows certain symptoms has been advised to self-isolate for 7 days, regardless of whether … Continue Reading

Score One for Shopping Center Landlords: Adequate Assurance of Future Performance Means Just What the Bankruptcy Code Says!

By Norman N. Kinel on Posted in US
In a recent decision, the Chief Judge of the District Court for the Southern District of New York reversed a decision of the bankruptcy court in the Sears bankruptcy case that was prejudicial to the interests of shopping center landlords whose tenants become chapter 11 debtors. The district court’s decision in MOAC Mall Holdings, LLC … Continue Reading

Which law applies when determining the validity of an assignment of receivables cross-border?

By Jens Rinze on Posted in Cross Border, EU, UK, US
The validity of an assignment of receivables cross-border depends on the law that applies to the assignment. What might amount to a valid assignment in one jurisdiction, does not mean, that it is valid in another and where there are competing claims to the receivables and competing jurisdictions, the question of which law applies and … Continue Reading

New Year, New Resolutions and New Name

By Rachael Markham and Mark Salzberg on Posted in Cross Border, EU, UK, US
Happy New year to all of our blog readers! With the start of a new decade, we are giving our restructuring and insolvency blog a fresh new look and name: Restructuring GlobalView. Restructuring GlobalView will provide readers with unique perspectives on restructuring and insolvency issues from around the globe, offering practical views from the global … Continue Reading

Cannabis and Bankruptcy: 2019 in Review

By Mark Salzberg on Posted in US
Courts struggled this year to find a balance between state-licensed cannabis activity and the federal right to seek bankruptcy protection under the Bankruptcy Code.  During 2019, we had the first circuit-level opinion in the bankruptcy/cannabis space that appeared to open the door to bankruptcy courts, albeit slightly.  We also had lower court opinions slamming that … Continue Reading

How does the EU Restructuring Directive compare to Chapter 11?

By Stephen D. Lerner on Posted in EU, UK, US
On June 26, 2019, the European Parliament and the Council of the European Union published a new EU Restructuring Directive on preventive restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (“Directive”). This is an extraordinary achievement given the existing differences in … Continue Reading

Up in Smoke: More Cannabis Companies Get Shut Out of Bankruptcy

By Mark Salzberg on Posted in US
Marijuana Cannabis LeafsIn another loss for the cannabis industry, a district court recently affirmed the dismissal of chapter 11 petitions filed by companies that sold product used by both state-licensed marijuana growers and non-marijuana growers.  The district court’s decision in Way to Grow, Inc. demonstrates that the door that was opened by the Ninth Circuit in Garvin … Continue Reading

No Right, No Power, No Claim: Anti-Assignment Provision Voids Claim Trader’s Proof of Claim

By Kyle Arendsen on Posted in US
Road Stop SignOn September 11, 2019, the Delaware district court affirmed the bankruptcy court’s decision to expunge a proof of claim filed by a claims trader in the Woodbridge Group of Companies, LLC bankruptcy case.  The court’s holding was based on three primary legal conclusions:  (1) the anti‑assignment provisions in the underlying loan agreements and promissory notes were … Continue Reading

Bankruptcy Court Tells Debtors They Must Choose Between Bankruptcy Or Being Able To Buy Medical Marijuana

By Mark Salzberg on Posted in US
We have written before about the virtual dead end faced by marijuana companies who try to seek protection in the bankruptcy courts.  Almost uniformly, bankruptcy courts have shut their doors on marijuana companies, including their landlords and suppliers.  These courts have held that although marijuana use may be legal in a majority of the States, … Continue Reading

Small Business Reorganization Act Signed Into Law—A New Frontier for Small Business Bankruptcies

By Kyle Arendsen on Posted in US
On August 26, 2019, President Trump signed the Small Business Reorganization Act (“SBRA”)  into law.  The SBRA is scheduled to take effect on February 22, 2020.  As we previously reported, the SBRA offers small businesses with aggregate liabilities that do not exceed $2,725,625 the opportunity to resolve their outstanding debts through a condensed and price‑conscious … Continue Reading

It Should Be Settled Law – Unsecured Attorney’s Fees Claims Are Permissible

By Jeffrey N. Rothleder on Posted in US
In Travelers Cas. & Sur. Co. of Am. v. PG&E, 549 U.S. 443 (2007), the Supreme Court held that bankruptcy law does not disallow a post-petition unsecured claim for attorney’s fees to the extent such claim is authorized by a pre-petition contract and not otherwise expressly disallowed. That pronouncement should have stopped all future litigation over … Continue Reading

Section 363(o) Implications: Bankruptcy Court Denies Debtor’s Request to Disband Consumer Creditors’ Committee

By Kyle Arendsen on Posted in US
On May 17, 2019, the Bankruptcy Court for the Southern District of New York announced that the Official Committee of Consumer Creditors (the “Consumer Committee”) appointed in the In re Ditech Holding Corp. bankruptcy case would not be disbanded.  Ditech, supported by the ad hoc group of term loan lenders (the “Ad Hoc Group”), had … Continue Reading

Attorneys Beware: Federal Court Reinstates Aiding and Abetting Breach of Fiduciary Duty Claim Against Law Firm

By Squire Patton Boggs on Posted in US
Attorneys who advise a distressed company usually work very closely with members of the board of directors.  A recent opinion from the United States District Court for the Western District of Texas provides a cautionary reminder to such attorneys not to lose sight of the fact that, notwithstanding that the company acts through its board, … Continue Reading

The Small Business Reorganization Act Reintroduced: A Way Forward for Small Business Reorganization?

By Kyle Arendsen on Posted in US
Last month, Congress reintroduced the Small Business Reorganization Act (“SBRA”), under which a new subchapter V would be added to chapter 11 of the United States Bankruptcy Code.  This new subchapter would provide small businesses with aggregate liabilities that do not exceed $2,566,050 with an opportunity to resolve outstanding liabilities through a streamlined and cost‑effective … Continue Reading

Careful Consideration Can Pay Dividends

By Ollie Ward-Jones on Posted in UK, US
Following our 2016 article, the Court of Appeal has upheld the decision of the High Court that dividends are liable to challenge as transactions defrauding creditors under section 423 of the Insolvency Act 1986 (the “IA”). The case of BTI 2014 LLC v Sequana S.A. & Others [2019] EWCA Civ 112 should serve as a … Continue Reading
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