In an opinion that mostly flew under the radar in 2021, Judge Christopher Sontchi from the Bankruptcy Court for the District of Delaware (the “Court”) found investment firm Yucaipa American Alliance Fund I, L.P. and Yucaipa American Alliance (Parallel) Fund I, L.P.

In an opinion that mostly flew under the radar in 2021, Judge Christopher Sontchi from the Bankruptcy Court for the District of Delaware (the “Court”) found a private equity sponsor (the “Sponsor”)¹ liable (and, in some cases, not liable) under various contractual and tort theories in connection with actions the Sponsor took or did not take in its failed efforts to stave off a potential bankruptcy filing of its portfolio company, Allied Systems Holdings, Inc., now known as ASHINC Corporation (“Allied” or the “Company

Overview

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Executive Summary

CVAs continued to be a popular restructuring tool in 2021. As the retail industry gears up for what is expected to be a busy festive period, it marks the end of another year in which the close scrutiny and attempted challenge by landlords to retail CVAs continued.

What is a CVA?

Alternative Dispute Resolution (ADR) is the overarching name given to the different processes used to determine disputes between parties out with a formal court process. ADR is becoming more popular, but is not as widely used by insolvency practitioners (IPs) in the UK to resolve disputes arising from an insolvency event as it perhaps should be.

The most recent UK and Scotland-specific statistics seem to show that the low comparative levels of corporate insolvency that we have seen as a result of the COVID-19 temporary measures may be coming to an end.

The Accountant in Bankruptcy (AiB), the Scottish equivalent of the Insolvency Service, reports that the number of Scottish companies becoming insolvent or entering receivership increased by over 80% in the second quarter of 2021-22, with 211 companies becoming insolvent compared with 117 in the same quarter of 2020-21.

In a recent decision that will be of considerable interest to insolvency practitioners, the English High Court dismissed a challenge to a liquidator's decision to assign causes of action originally vested in an insolvent company to a specialist insolvency litigation financing company.

COVID has tested the resilience of the construction industry over the past 18 months: temporary site closures; working restrictions; price increases and material shortages, to name but a few. Those challenges have brought cashflow pressures to bear. Is the next storm to be weathered that of solvency? It certainly seems ever more acute in these unprecedented times.