In Short:
The Action: Courts in Singapore and the states of New York and Delaware have formally implemented Guidelines for Communication and Cooperation between Courts in Cross-border Insolvency Matters.
The Motivation: The Guidelines were developed to improve the efficiency and effectiveness of cross-border insolvency proceedings and to encourage coordination and cooperation among relevant courts.
Looking Ahead: Expect the Guidelines to be implemented in other significant jurisdictions.
On March 10, 2017, Singapore's Parliament approved the Companies (Amendment) Bill 2017 ("Act") to enhance the country's corporate debt restructuring framework. The Act was assented to by President Tony Tan Keng Yam on March 29, 2017, and became effective after it was published in the Singapore Government Gazette on March 30, 2017.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
It is commonly understood that, upon commencement of a bankruptcy case, section 362 of the Bankruptcy Code operates as an automatic statutory injunction against a wide variety of creditor actions and activities.
Slide Rules and Hula Hoops – Business Obsolescence and Bankruptcy
The concept of “equitable mootness” is a doctrine of relatively long-standing in bankruptcy jurisprudence. It has been used by courts to avoid determination of issues raised on appeal that would require the unscrambling of a plan previously confirmed and implemented. However, that doctrine has recently been questioned in a variety of decisions. It appears that the scope of equitable mootness is clearly ebbing. In that context, a recent decision by this Sixth Circuit Court of Appeals provides an opportunity to further examine the doctrine.
“Reasonably equivalent value” – – part of the standard for evaluation of potential constructive fraudulent transfers – – is both subjective and imprecise. The words “equivalent value” require the court to make a subjective judgment whether consideration received in exchange for a transfer is worth the same as the consideration transferred by the debtor. And the considerations exchanged by the two parties are necessarily of differing characters. A transaction may involve the exchange of money for a tangible asset or for services.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
Last week, our post “You Can’t Always Get What You Want” discussed a Texas bankruptcy court decision rejecting efforts by debtor Sam Wyly to claim as exempt a number of offshore private annuities.
The bankruptcy courts have a long history of being willing to use their judicial power under the Bankruptcy Code to prevent perceived efforts by debtors to inappropriately shield their assets from creditors. This is true even when the debtors employ structures and devices that are complex and crafted in seeming compliance with applicable law.