In this note, we provide a high-level overview of key restructuring cases from last year in the US, Asia Pacific and Australia and consider the outlook in 2024 for restructuring transactions.
US
Currently, Ukrainian legislation does not provide for a separate “pre-pack proceeding” as outlined in the draft EU directive for harmonising insolvency law (“Directive Proposal”). However, selling a business is a legally feasible option under the Ukrainian Bankruptcy Code and related laws, both in a pre-bankruptcy phase and during bankruptcy proceeding.
On December 16, 2021, United States District Judge Colleen McMahon of the Southern District of New York overturned the confirmation of Purdue Pharma’s chapter 11 plan of reorganization, “put[ting] to rest” the non-consensual third-party releases debate that has “hovered over bankruptcy law for thirty five years.” Judge McMahon concluded in her 142-page opinion that “the Bankruptcy Code does not authorize such non-consensual
In response to the economic crisis caused by the COVID-19 pandemic, lawmakers very quickly started working on improving the legal framework to enhance existing and develop new restructuring instruments. Contrary to expectations, not that many restructurings actually took place in 2020, likely because of support made available to businesses.
In May 2020 three years have passed[1] since Ukraine received the last funding of nearly USD 1 billion from the International Monetary Fund (the “IMF”). The funding that the IMF allocated to Ukraine was nearly four times larger than previous funding.
The nearly $350 billion loan program made available to small businesses by the Coronavirus Aid, Relief, and Economic Security (CARES) Act was tapped out in less than two weeks. In response to this overwhelming demand, on Friday, April 24, 2020, an additional $320 billion was funded into the loan program, and the second round of applications for small businesses requesting these loans will open on Monday, April 27, 2020.
In this article, we focus on working capital and consider ways a business can seek to weather the storm and preserve all-important liquidity through this challenging period.
Practical Tips
Given the unprecedented challenges presented by COVID-19 globally, what can senior management do in order to manage and mitigate the risk to the company's financial health?
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.
In 2016, the Ukrainian parliament passed the Law on Financial Restructuring (the Financial Restructuring Law) with the aim of creating a workable procedure for voluntarily restructuring debt obligations of Ukrainian borrowers. Technically, the Financial Restructuring Law became effective on 19 October 2016 but did not become operational because the required bodies envisaged in the Financial Restructuring Law were not in place.