New York’s Renewed Efforts to Pass Sovereign Debt Legislation (US)

As discussed in our prior blog entitled “New York’s Sovereign Debt Restructuring Proposals,”[1] three bills were introduced in the New York state legislature to overhaul the way sovereign debt restructurings are handled in New York.  Those bills sought to implement a comprehensive mechanism for restructuring sovereign debt, limit recovery on certain sovereign debt claims, and amend the champerty defense.  None of the bills advanced to a full vote during the 2023 legislative session and, therefore, failed. 

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Texas Bankruptcy Court Declines to Deem Nonvotes as Votes in Favor of Plan (US)

As seen in the recent proliferation of bankruptcy cases seeking a structured dismissal or conversion after a successful sale, debtors constantly seek creative and efficient ways to wind up a case, including through a traditional plan of liquidation.  Yet, as discussed below, debtors must ensure that any proposed voting procedures for a plan comply with section 1126 of the Bankruptcy Code, or are at least supported by, or supportable with, prior precedent.  Otherwise, notwithstanding a debtor’s creativity and intent to further benefit a creditor class, such voting procedures will likely be denied.

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Update for Insolvency Practitioners on UK Companies House Filings

Office Building

Following our previous alert, in which we highlighted an issue with entries relating to registered security maintained at Companies House being incorrectly updated to indicate that they had in fact been discharged without the awareness of the relevant company or security holder, it appears that some (potentially all) unauthorised filings have been – or are in the process of being – corrected. Is this good news? Yes, but with some reservations.

Our latest insight considers what the current position is, and the impact on insolvency practitioners and other third parties that rely on Companies House registers.

Quick Guide to Administration (UK)

For those unfamilar with the various insolvency processes it is not always easy to differentiate between them.

In our latest insight we have produced a quick guide to administration that explains the procedure, benefits and effect of administration on third parties, including employees, suppliers and landlords. Our quick guide also explains the administrator’s role and the purpose of administration, as well as providing an overview of the sale process and the impact that this has.

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Members Voluntary Liquidations (MVL) – Update

In recent months, there have been a few changes regarding MVLs which we have set out in this insight as a helpful reminder to practitioners. 

Our insight considers the changes to filing statements of solvency, comments on the practice of remote swearing those statements and highlights the change in policy regarding clearance letters from HMRC.

Additional Caution Required for Insolvency Practitioners Relying on Companies House Filings (UK)

Over the past week, reports have emerged about filings that have been made at Companies House marking a charge as satisfied, without the company’s or relevant lender’s knowledge.

There were rumours last week, which were simply that, because Companies House had not publicly announced any issue, but, as we have seen over the weekend and is now widely reported in the news, it appears that there have been at least 800 erroneous filings.

Our alert explains the possible impact that this could have on insolvency practitioners.

Hopefully the situation will be resolved shortly but watch this space for further updates.

The Restructuring Outlook in Australia, Asia Pacific and the US in 2024

In our latest insight we look back at the key restructuring cases and events from last year in the United States, Asia-Pacific, and Australia and consider the outlook in 2024 for restructuring transactions as a whole.  

This insight provides an overview of the US banking crisis involving Silicon Valley Bank and Signature Bank, the real estate crisis in China, and landmark rulings to come from Australia’s recent bankruptcy filings.  We also reflect on how we expect interest rates, inflation, geopolitical conflicts and political uncertainty to impact the restructuring market in the coming months.

Mallinckrodt Trust Asserts Novel Argument in Response to Safe Harbor Defense (US)

A common defense to a fraudulent transfer claim in bankruptcy concerning a securities transaction is the “safe harbor” defense under section 546(e) of the Bankruptcy Code.  In a unique twist, a post-confirmation trust in Delaware recently argued that the safe harbor defense should not be available if the underlying transaction was illegal under the law where the debtor/transferor was incorporated.  As discussed below, both sides present thoughtful and well-reasoned arguments, and the bankruptcy court is now set to rule on whether a fraudulent transfer complaint should be dismissed for three defendants.

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Aggregate’s UK Restructuring Plan Sanction Hearing: Adler in Action

On 7th February 2024, Mr Justice Richards heard closing submissions in the English High Court for a contested sanction hearing for Aggregate Group’s Part 26A restructuring plan. This hearing presented one of the first opportunities to analyse how the Adler decision will affect restructuring plans going forward.

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Changes to the UK Water Special Administration Regime – Do Pension Trustees of Water Industry Schemes Need to Care?

Changes are afoot to the statutory regime governing special administrations for regulated water companies (the SAR) following the publication of a suite of new legislation.

Impact of the changes on pension trustees

Further details of the changes are set out below, but perhaps the most significant change for creditors generally, and pension trustees in particular, is the update to the insolvency waterfall to allow for priority payment of government funds. In a nutshell, this means that any funds provided by the Secretary of State to the special administrator by way of loan or grant will be paid out in priority to any s75 debt that may be owed to pension trustees. Given the potential size of such government grants, this could have a sizeable impact on recoveries for pension schemes and all unsecured creditors.

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