Somewhere close to Sandton – Africa’s richest square mile – lies the suburb of Parkmore in the Gauteng Province. This is the principal place of business of a debtor that cannot pay its debts, and is facing the barrel of an application for its winding-up. The debtor’s registered address is in Mbombela within the province of Mpumalanga – close to Africa’s Big Five game. Two court options come into play.
South African state-owned enterprises (SOEs) are coming under tremendous pressure to do something to extricate themselves from their financial woes. Any kind of bankruptcy event cannot be the answer: because of the obvious cross-default impact such a declaration will have on various debt and other instruments in the capital markets. It will also be catastrophic to the Government’s standing and rating in the financial markets.
Chapter 6 of the South African Companies Act, 2008, as a corporate restructuring regime, provides a formal restructuring tool for financially distressed (which exists when a company is unable to pay its debts as they fall due (cash-flow insolvency) or when a company’s liabilities exceed the value of its assets (balance-sheet insolvency) or when those events are likely to occur in 6 months (imminent insolvency) companies.
On June 26, 2019, the European Parliament and the Council of the European Union published a new EU Restructuring Directive on preventive restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (“Directive”).
This is an extraordinary achievement given the existing differences in restructuring regimes across EU Member States.
For decades, restructuring and insolvency matters in the Dominican Republic involving merchants and companies in non-regulated industries have been carried out on a “de facto” basis, due to the obsolescence of the existing legal framework and institutions. Fortunately, that is not the case anymore.
The recent decision of the United States Court of Appeals for the Third Circuit in In re One2One Communications, LLC may radically alter the ability of debtors to escape appeals of confirmed plans for reorganization. The Third Circuit, which governs the influential Delaware bankruptcy courts, has for almost 20 years embraced the judicially created doctrine of “equitable mootness” as a basis for dismissal of ap
Illinois Governor Rauner presented his turnaround agenda in his “State of the State” address last week and called for, among other things, the state “to extend to municipalities bankruptcy protections.” Mirroring the proposed legislation introduced by Representative Ron Sandack in January, and reported on in an earlier post, Illinois seems positioned to provide municipalities with clear and direct access to Chapter 9 bankruptcy and
On February 6th, Federal District Judge Francisco Besosa ruled that Puerto Rico’s municipal debt-restructuring law, the “Recovery Act”, was unconstitutional stating that: “The Recovery Act is pre-empted by the federal Bankruptcy Code and is therefore void.” The Court also permanently enjoined current and future government officials from enforcing the Act. Puerto Rico has announced that it will be appealing the ruling.
Illinois’ municipal distress is severe and we have witnessed the political maneuvers to address Chicago’s ongoing fiscal dilemma. In 2013, Chicago Mayor Rahm Emmanuel stoked bankruptcy fears citing the city’s ballooning pension obligations that he estimated could exceed $1.6 billion in 2016. Pew Charitable Trusts has reported that among the nation’s five largest cities, Chicago has put aside the smallest portion of its looming pensions obligations. While certain changes have been made to counter the pension funding deficit, including Governor Quinn’s hotly contested