1. State of the Restructuring Market
1.1 Market Trends and Changes
State of the Restructuring and Insolvency Market
There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).
Fewer Insolvencies for More Opportunities
At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:
PricewaterhouseCoopers LLC (PwC) won another victory in the MF Global litigation when the Second Circuit Court of Appeals affirmed the dismissal of claims brought by former commodities customers (the “Customers”) of MF Global Inc. (“MFGI”). This holding is important for its clear affirmation of the in pari delicto doctrine and as a visible limitation on claims by parties not in privity.
Compensation to be paid to a bankruptcy estate professional is many times subject to intense dispute. In the case of a bankruptcy trustee, section 326 of the Bankruptcy Code provides for a tiered system of compensation based upon the amount of money distributed by the trustee to parties in interest. However, as demonstrated by the recent decision in In re Virgin Offshore U.S.A., Inc., 2015 Bankr. LEXIS 233 (Bankr. E.D. La. Jan.
On January 7, the Bankruptcy Court for the District of Delaware issued an opinion that may have far reaching effects on cases involving asbestos liability. Companies with potential asbestos liability, and actual and potential asbestos claimants, would be well advised to consider the Court’s opinion.
Imagine: you are a lender that has loaned substantial sums of money to an individual, secured by real property owned by the borrower. After the borrower defaults and negotiations fail, you seek and obtain the appointment of a receiver. But now litigation ensues—about the loan documents, about contract defaults, about interest rates, about foreign law. After a substantial investment of time and money, your trial date draws closer. At some point during this odyssey, your borrower secretly transfers the real property collateral to a newly-created, single-member LLC.
On October 21, 2010, the New York Court of Appeals (the Appeals Court), New York’s highest appellate court, addressed two appeals, and then issued an important ruling regarding the parameters of the affirmative defense of in pari delicto in suits against outside auditors, holding that the doctrines of in pari delicto and imputation are a complete bar to recovery when the corporate wrongdoer’s actions are imputed to the company.
The Doctrines of In Pari Delicto and Imputation