In Short

Debtors in non-U.S. bankruptcy or restructuring proceedings commonly seek to shield their U.S. assets from creditor collection efforts by seeking "recognition" of those proceedings in the United States in a case under chapter 15 of the Bankruptcy Code. If a U.S. bankruptcy court recognizes the debtor's foreign proceeding, the Bankruptcy Code's automatic stay prevents creditor collection efforts, including the commencement or continuation of any U.S. litigation involving the debtor or its U.S. assets. A U.S.

One year ago, we wrote that 2022 would be remembered in the corporate bankruptcy world for the "crypto winter" that descended in November 2022 with the spectacular collapse of FTX Trading Ltd., Alameda Research, and approximately 130 other affiliated companies that ignited the meltdown of many other platforms, exchanges, lenders, and mining operations because they did business with FTX.

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.

In most cases seeking recognition of a foreign bankruptcy proceeding in the United States under chapter 15 of the Bankruptcy Code, the foreign debtor's "foreign representative" has been appointed by the foreign court or administrative body overseeing the debtor's bankruptcy case.

The case ofLiberty Commodities Ltd v Citibank NA London & Ors [2023] EWHC 2020 (Ch) provides a helpful reminder of the principles that the court will adopt when dealing with a winding up petition – particularly where there are supporting creditors.

Making an out of hours qualifying floating charge holder (“QFCH”) appointment can be problematic due to the procedural requirements set out in Rule 3.20 of the Insolvency (England and Wales) Rules 2016 (the “Rules”).

A thorny question facing a company when considering a Restructuring Plan is how to deal with HMRC particularly following HMRC’s opposition to recent plans.

Creditors now have some assistance in these deliberations thanks toguidance published by HMRC setting out how they will approach discussions with companies considering a Restructuring Plan.

In In re Golden Sphinx Ltd., 2023 WL 2823391 (Bankr. C.D. Cal. Mar. 31, 2023), the U.S. Bankruptcy Court for the Central District of California denied a motion filed by a creditor of a chapter 15 debtor seeking discovery from a bank that had provided financing to one of the debtor's affiliates.