What can a lender do about successive bankruptcy filings by a borrower? What can lessors do when their tenants file successive bankruptcy petitions? A recent decision by a bankruptcy court in the Eastern District of New York gives guidance on these questions.

In a prior post, we discussed the Third Circuit Court of Appeals’ decision in Jevic Holding Corp., where the court upheld the use of so-called “structured dismissals” in bankruptcy cases, and the Supreme Court’s grant of certiorari. Yesterday, the Supreme Court heard oral argument in Jevic. The Court’s ultimate ruling will likely have a significant impact upon bankruptcy practice.

With the aim of improving transparency around ownership and control of companies, all UK unquoted and limited liability partnerships are required to maintain new registers of People with Significant Control (PSC). The details should be recorded in the company’s own PSC register and are to be filed at Companies House.

Anyone who satisfies at least one of the following conditions:

What does it mean to “cure” a default in the context of a plan of reorganization? This question arises by virtue of section 1123(a)(5)(G) of the Bankruptcy Code, which requires that a plan provide adequate means for the plan’s implementation, including the “curing or waiving of any default.” On November 4, 2016, the Ninth Circuit Court of Appeals defined what it means to “cure” by holding that a debtor can only cure a contractual default under a plan of reorganization by complying with contractual post-default interest rate provisions.

The Facts

In December 2015, Hart J heard (and refused) an application by Mr Golstein for revocation of a decision of 31 May 2012 passing a proposal by Mr Bishop to enter into an Individual Voluntary Arrangement (IVA). Mr Golstein, who was claiming a sum of £122,000 from Mr Bishop, appealed the decision on the basis that his claim was not correctly admitted for voting purposes and that there was material non-disclosure by Mr Bishop which led to the passing of the IVA.

The Decision

Richards J provided directions on issues brought forward by administrators including:

• the treatment of interest

• in the context of various provable and non-provable debts.

The newest in the series of judgments to deal with interest arising out of creditors’ claims in the administration of Lehman Brothers International (Europe) (LBIE), this latest instalment sought to deal with six supplemental issues on which the administrators sought directions.

One interesting discussion related to:

Having launched the original version three years ago, we have refreshed our Safeguarding Your Business guide as an eBook. The guide assists clients in protecting themselves either proactively or reactively in respect of a counterparty’s insolvency with new sections on trusts and examples of how we have helped, using some of the principles raised.

When should debt be recharacterized as equity? The answer to this question will have an enormous impact upon expected recovery in bankruptcy since equity does not begin to get paid until all prior classes of claims are paid in full. In a recent unpublished opinion, the Fourth Circuit Court of Appeals provided some guidance on when and in what circumstances recharacterization is appropriate. The Court’s decision also serves as warning to purchasers of debt that they may not be able to hide behind the original debt transaction in a recharacterization fight.

Validation orders under s127 Insolvency Act 1986 will only be made:

• in special circumstances

• where a particular transaction is one that is in the interests of the creditors as a whole; and

• the circumstances warrant the overriding of the pari passu principle

The Facts

The Jevic Holding Corp. bankruptcy case is proving to be precedent setting.  In a prior post, we examined how the court had greatly increased the evidentiary burden on a party seeking to hold one company liable for the debts of another company under a “single employer” theory.  That ruling was seen as a boon for private equity firms who were oftentimes the target of Chapter 11 creditor