On 23 January 2024, the Court of Appeal handed down its much anticipated judgment[1] on the appeal of the Adler restructuring plan pursuant to Part 26A of the Companies Act 2006 (“RP”), which was sanctioned by the High Court on 12 April 2023
As we reported in a previous blog the German legislator in November 2022 introduced the Law on the Temporary Adaption of Restructuring and Insolvency Law Provisions to Mitigate the Consequences of the Crisis (SanInsKG).
There are a few things that we can be almost certain of in 2024, and others are things to add to the watchlist, but with a potential change in government on the cards, there are likely to be a few curveballs thrown into the mix that none of us can predict.
Development of Restructuring Plans (RPs)
On 23 September 2023, the new Act on Preventive Restructuring (284/2003 Coll.) entered into effect in the Czech Republic (the “Czech Preventive Restructuring Act”), incorporating the EU Directive 2019/1023 on preventive restructuring frameworks in the Czech legal environment.
The judgment handed down in the matter of CB&I UK Ltd suggests that the English Courts will not expedite or truncate sanction hearing timetables to accommodate requests from companies which have applied for a restructuring plan under Part 26A of the Companies Act 2006 (“Restructuring Plan”) unless there are good reasons for doing so.
There are a few things that we can be almost certain of in 2024, and others are things to add to the watchlist, but with a potential change in government on the cards, there are likely to be a few curveballs thrown into the mix that none of us can predict.
Increasing Insolvencies
In Lehman Brothers (PTG) Ltd (In Administration), the court considered whether to grant an order extending the administration of Lehman Brothers (PTG) Ltd (the “Company”) for a further two years and in doing so, provided some useful observations about when a court will grant an extension where a company is in distribution mode.
Amid the current market uncertainties, distressed asset sales are likely to rise. International investors are looking for efficient solutions, preferably ones that reflect solutions in their home jurisdictions. One popular mechanism is the use of pre-pack sales. A pre-pack sale manages the adverse impact of insolvency proceedings on the distressed company’s business, while reducing the time and cost of such proceedings, and offering greater asset realisation to be distributed among creditors.
Who owns cryptocurrency held by a cryptocurrency exchange? Do the cryptocurrency assets belong to the customers who deposited the crypto with the exchange, or do the cryptocurrency assets belong to the exchange itself? The answer to this question will have huge significance, both in terms of creditor recoveries as well as preferential transfer liability exposure.
A consensual resolution among all stakeholders is an important goal of any bankruptcy proceeding. But how can parties reach a consensual deal if financing is drying up quickly and the prospect of confirming a plan is grim? That was the issue facing the Rockport debtors (the “Debtors”) in their Delaware bankruptcy cases styled In re The RP Co. Liquidating, LLC. In this case, the Debtors filed a motion asking the bankruptcy court to approve a global settlement (the “Settlement”) with all parties-in-interest—except the Office of the United States Trustee (the “U.S. Trustee”).