Natasha Harrison, Fiona Huntriss and Nick Turvey, Boies Schiller & Flexner

This is an extract from the second edition of GRR's The Art of the Ad Hoc. The whole publication is available here.

Overview

As lenders prepare for a world with an increased risk of borrower failures, liquidations, and bankruptcies, many have begun focusing on requiring that borrowers form special purpose entities (“SPEs”) to mitigate against those risks. In this publication, we explore how recent case law has viewed the formation and use of SPEs and which structures have been more effective than others.

Current State of the Law Regarding Bankruptcy Remote Entities

On December 1, 2020, certain amendments to the Federal Rules of Bankruptcy Procedure take effect. The amendments largely modify rules governing bankruptcy appeals, but also impact Rules 2002 and 2004. The changes are as follows:

On Monday, November 30, Bankruptcy Judge Marvin Isgur approved a request by Ultra Petroleum and its affiliated debtors that he certify his October 26, 2020 memorandum opinion for direct review by the United States Court of Appeals for the Fifth Circuit.

I.OVERVIEW

(a)What are SPACs?

In our previous update dated 5 November 2020, we looked at when it is reasonable for insolvency practitioners to continue litigation. In this article, we explore the circumstances in which personal costs orders may be made against liquidators.

Key points

一、概述

1、不寻常的SPAC

SPAC（“Special Purpose Acquisition Company”）是上市公司投资工具，也被称为 “空头支票”或 “空壳公司”。 SPAC由在投资、财务和企业管理领域具有丰富经验的专业人士作为发起人设立，其设立目的是在某些行业或地域中收购某个不特定的经营性企业。SPAC将在设立之后，即开始通过首次公开发行（“IPO”）由普通股和认股权证组成的证券进行募资。SPAC的证券在证券交易所挂牌并公开交易。

SPAC必须在IPO完成后的18-24个月内找到目标公司（“目标公司”）并完成企业兼并，否则将主动清算，且IPO的募资将退还给公众股东。如已确定目标公司并完成企业兼并，则SPAC将与目标公司合并成立为一间新公司（“存续公司”），存续公司将成为SPAC的承继实体并继续作为上市公司存续。

2、SPAC市场

Op 12 november 2020 heeft de Tweede Kamer het wetsvoorstel tot wijziging van de Tijdelijke wet COVID-19 SZW en JenV (35557) als hamerstuk aangenomen. Vandaag, 24 november 2020, is het wetsvoorstel ook door de Eerste Kamer als hamerstuk afgedaan. Het wetvoorstel maakt het mogelijk (in Hoofdstuk 2 Tijdelijke voorziening betalingsuitstel COVID-19) om de rechter te verzoeken:

A legislative proposal to amend the Temporary Act COVID-19 was adopted by the Dutch parliament on 12 November 2020, and adopted by the Dutch Senate on 24 November 2020. The proposal (the COVID-19 Amendment Act) will enter into force shortly and remain in effect until 1 February 2021. This GT Alert summarizes the measures included in COVID-19 Amendment Act Chapter 2 (Temporary measures for the stay on recovery measures COVID-19).

The COVID-19 Amendment Act provides (in Chapter 2) for the possibility of the debtor requesting that the courts, in connection with the pandemic:

In a notable decision interpreting the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Bankruptcy Court for the Middle District of Alabama held that Chapter 13 debtors behind on their payments before March 2020 may seek modification of their plan if they suffered from COVID-19 related financial distress.