While the Judge-made doctrine of equitable mootness continues to beguile and often stymie parties-in-interest seeking to appeal an order confirming a chapter 11 plan (as well as other orders which are on appeal prior to confirmation of a plan), appellants in the Fifth Circuit can continue to rest assured that the doctrine will be applied only as a “scalpel rather than an axe.” That is because in the Fifth Circuit, the doctrine—which can be described as a form of appellate abstention—is applied only on a claim-by-claim, instead of appeal-by-appeal basis.

On Friday, 29 July the Minister for Enterprise, Trade and Employment signed into law the European Union (Preventative Restructuring) Regulations 2022 (the "Regulations").

Although there is no technical requirement for a judgment to apply to make a debtor a bankrupt (as confirmed by the Supreme Court in Harrahill v Cuddy[1]), the Court has a very wide discretion to refuse to issue a bankruptcy summons. Therefore, an applicant will typically rely on a judgment to ground a bankruptcy petition.

Background

We have written many times over the past few years about how the bankruptcy courts are off-limits to state-legalized cannabis businesses. This past year brought no new relief to the cannabis industry, and the doors to the bankruptcy courts remain shut. Are the other federal courts off-limits as well? A recent district court decision from the Southern District of California sheds some light on this issue, and indicates that the district courts are at least partially open to participants in legal cannabis businesses.

Factual Background

The High Court recently extended the bankruptcy period of an Irish businessman to a total of 13 years.

The usual bankruptcy term is one year, however this can be extended in cases of non-cooperation or non-disclosure of assets with the maximum term being 15 years.

On Monday 8 November, the High Court imposed one of the longest ever disqualification periods for a company director. The Court held that this was "one of the most extreme cases of using a company for [oil] laundering", and granted an application on behalf of the liquidator of Gaboto Limited for the disqualification of the two directors for a period of fifteen years.

Here we go again – proposed bankruptcy venue legislation is back after previous “reform” efforts came up empty. For those seeking legislative action, what are the chances for venue reform now?

While examinership is a successful and internationally recognised rescue process for Irish companies, there has been a concern for some time that is out of reach of smaller businesses due to the associated costs. As part of the government’s response to the economic challenges of the pandemic, the Department of Enterprise has published a rescue process for small and micro businesses.

In 2020, bankruptcy court doors continued to be shut to cannabis companies. Perhaps most troubling is the continued bar for companies that are only tangentially involved in the state-legalized cannabis industry. Although outlier cases exist, and even though courts have hinted that bankruptcy may be appropriate for some cannabis-related individuals and companies in some situations, there is a consensus now that bankruptcy is generally not available to individuals and companies engaged, directly or indirectly, in the cannabis industry.

While the recent Brexit trade deal contains various provisions for the conduct of trade in the post-Brexit era, it does not provide clarification for new cross-border insolvency proceedings involving the United Kingdom.

However, the Withdrawal Agreement which came into force on 1 February 2020 and established the terms of the UK's withdrawal from the European Union, does provide some comfort for insolvency practitioners, but only where insolvency proceedings were opened prior to the end of the Brexit transition period.