Bitcoin Flash Crash Wipes Out over $200 Billion from the Crypto Market Due to Impending Bankruptcy Evergrande
The bitcoin exchange rate has fallen to its lowest level since early August; following a moderately bullish weekend, the market took a sharp turn downward, Blockchain News reported. The digital currency is responding to the impending bankruptcy of Chinese real estate giant Evergrande and seems to be following regular stock exchanges around the world. The crash wiped out more than $200 billion from the crypto market and has not only affected bitcoin, but all other cryptocurrencies, which seem to be on a downward trend with no real sign of recovery just yet.
Growth paths in developing Asia continue to diverge, as some nations struggle with waves of infections while those that quickly rolled out vaccines and contained outbreaks gain from stronger global demand, according to the Asian Development Bank, Bloomberg reported. The region’s gross domestic product will expand 7.1% this year, down from 7.3% forecast in April and a turnaround from last year’s 0.1% contraction, the ADB said in its Asian Development Outlook Update. It sees developing Asia’s growth moderating to 5.4% in 2022.
Japan's financial watchdog said it requested Mizuho Financial Group Inc. and its banking arm Mizuho Bank to submit a work plan for system maintenance after a series of system failures this year, in a rare move to effectively oversee the system of a major bank, Kyodo News reported. The Financial Services Agency made the request as part of its business improvement order issued amid lingering concerns over the security of the financial group's system after it experienced seven failures this year.
Malaysian Billionaire Brothers’ IOI Properties Submits Only Bid for Marina Bay Hotel, Residential Site
IOI Properties Group — controlled by billionaire brothers Lee Yeow Chor and Lee Yeow Seng — submitted the only bid for a mixed-use hotel and residential site as the Malaysian developer doubles down on its investment in Marina Bay, Singapore’s downtown financial district, Forbes reported. Boulevard View, a wholly owned subsidiary of Malaysia-listed IOI Properties, offered S$1.51 billion ($1.1 billion) for the 99-year leasehold site, the Urban Redevelopment Authority said late Tuesday.
China Evergrande Group’s main unit has said it has “resolved” an interest payment due on one of its domestic bonds on Wednesday, offering some relief to jittery markets that had been on edge over fears that a messy default of China’s No. 2 property developer could ripple through China’s economy and the global financial system, Al Jazeera reported.
There have been many heated debates of late about the 90% or higher haircuts that lenders have taken in several high-profile bankruptcy resolutions, the New Indian Express reported. Erstwhile promoters, resolution professionals and even the committee of creditors have all been blamed by turns for the state of affairs. Opinion writers have written angry columns, and TV channels have carried heated panel discussions.
Unable to sell such assets as its retail outlets and its online domain, Brazil’s Sarava Libraries suffered a new setback in its judicial recovery plan and risks declaring bankruptcy, Lodi Valley News reported. After an action by one of its creditors, technology company Infosys, which questioned the retailer’s plan filed in March, the court has now decided that Sarava will file a new proposal within 30 days, under pain of filing for bankruptcy. However, a few days before this decision the company had already made an adjustment to the plan and is contemplating the failure to sell the assets.
In Herat, a key axis of trade in western Afghanistan, a wave of bankruptcies is feared among traders, who express their “hopelessness” in the face of the deterioration of the country’s economic situation after the return of the Taliban to power in the middle of August, Market Research Telecast reported. “At the beginning, when the Taliban arrived, people were very happy, because we perceived that with them security was returning,” says Faghir Ahmad, a trader and importer of food products from Iran, very close to Herat.
Aeroméxico Receives Court Approval of Extension of Exclusive Period to File Its Plan of Reorganization
The U.S. Bankruptcy Court for the Southern District of New York, which is presiding over Aeroméxico's chapter 11 voluntary financial restructuring process, granted the company's request for extensions of the plan exclusivity periods, according to a company press release. The exclusive period for filing a chapter 11 plan now expires on Oct. 8, 2021, subject to further extension as ordered by the court. On Sept. 10, 2021, the company delivered to its DIP Lenders the Final Valuation Materials and the Refinancing Qualification Certificate in accordance with the DIP Credit Agreement.
Hong Kong, U.S. Hedge Funds Root for Luckin Coffee to Overcome Accounting Scandal with Debt-Restructuring Pact
Not many would have given Luckin Coffee a chance to survive its accounting fraud, yet since falling into provisional liquidation in July 2020, the firm has opened more stores, is getting a capital injection to repay creditors and is looking to exit chapter 15 bankruptcy protection, the South China Morning Post reported. On Tuesday, the Chinese Starbucks wannabe set another milestone by inking restructuring terms that could make bondholders almost whole and settle U.S. class-action lawsuits.
Resources by Country & Region
Adjusting a pre-insolvency scheme to respond to the COVID-19 crisis by Nuno Líbano Monteiro and Catarina Guedes de Carvalho
According to the OECD, Portugal is in the top three countries in terms of implementing new measures to face this COVID-19 pandemic. However, regarding the legal framework of insolvency and restructuring, the only direct, exceptional and temporary measure approved by the Portuguese authorities was to suspend the time limit for the debtor itself to petition for insolvency, with effect from 7 April 2020. No pre-insolvency exceptional measures have been adopted.
The Directive (EU) 2019/1023 on preventive restructuring frameworks ("the Directive") was passed on 20 June 2019 bringing about a change of paradigm in corporate restructuring. A change that should allow the States of the European Union to catch up with countries adhering to the Anglo-Saxon model, both in restructuring and insolvency matters and also upstream, in financial matters, due to the influence of the insolvency legislation on the provision of credit ex-ante.
Was court-life across Europe prepared for the COVID-19 crisis? by José CARLES, Laurent Le PAJOLEC and David ORSULA (Co-chairs of the Insolvency Tech & Digital Assets Wing)
COVID-19 and the correspondent lockdown measures have affected our lives in many ways. From a legal perspective, it has proven that jurisdictions that were already adapted to technology have provided a better response in the administration of justice.
In January 2020, the world woke up facing a phenomenon that some had predicted but few wanted to hear about or were prepared for: a global pandemic, now commonly called the COVID-19 crisis. Immediately, many economists were convinced that the world was heading for a stock market crash and an economic crisis. They were right. The stock market sank, and all countries that imposed strict lockdown measures face a significant contraction in their GDP.
The past experience with the European Insolvency Regulation (2000) has shown that even if all the courts in the Member States are only bound by decisions delivered at the EU level by the CJEU, all interested parties involved in an insolvency case (namely courts, insolvency practitioners, chartered accountants, lawyers and even debtors themselves in certain cases) may find it of great interest to look at the decisions made by other courts in other Member States for guidance.
This updated edition describes the framework of the European Insolvency Regulation Recast (adopted in June 2017), reviews its major rules, highlights the differences from the old EIR 2000, and makes references to the most important and recent cases of the Court of Justice of the European Union. An essential guide for non-European judges, practitioners and scholars who are confronted with this domain of law, as well as anyone dealing with EU-related cross-border cases, this book serves as a concise and comprehensive introduction to the EIR Recast.
Chapter 15 for Foreign Debtors covers all aspects of the UNCITRAL Model Law on Cross-Border Insolvency as well as chapter 15 of the Bankruptcy Code, and provides details about the Foreign Representative, avoidance actions, creditor protections, concurrent proceedings, comity and much more. The book also includes an extensive appendix filled with more than 500 pages of sample case documents and forms related to chapter 15 proceedings.
This book is the latest addition to our list of publications and it provides basic information on Islamic finance. It is meant to be a useful reference tool to the majority of insolvency practitioners who do not work in this field. The chapters in this book were selected on the basis that it is expected that most INSOL members currently have very limited understanding of Islamic finance.
The book has 10 chapters, a country study, and an annexure with a glossary of Islamic finance terms. Following the introductory chapter there are chapters on: