Over the Bank holiday weekend, the UK government announced that it intends to introduce new legislation to implement certain measures (detailed below) as soon as parliamentary time permits.

Weil Summer Associate David Rybak contributed to this post

In Momentive Performance Materials, the Second Circuit declined to dismiss as equitably moot the appeals of certain noteholders.

The United States Second Circuit has issued its ruling in the Momentive Performance Materials casesresolving three separate appeals by different groups of creditors of Judge Bricetti’s judgment in the United States District Court of the Southern District of New York, which affirmed

Good news: structured dismissals have survived Supreme Court scrutiny. Bad news: dismissals may be harder to structure, given yesterday’s 6-2 decision overruling the Third Circuit in Jevic narrowing the context in which they can be approved. We now have guidance on whether or not structured dismissals must follow the Bankruptcy Code’s priority scheme. The short answer is that they must.

The High Court yesterday held that a Chairperson of a shareholder scheme meeting may reject votes cast against a scheme of arrangement in circumstances where the shares were acquired through an artificial share-splitting exercise designed to frustrate the scheme. It is the first English case to consider this issue and while it arose in the context of a shareholder scheme, the impact is also significant for debt restructurings implemented by way of a creditor scheme of arrangement.

Background

On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance. In this briefing we consider the proposals and what it means for European insolvency and for the UK.

On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance (the Proposals).

What are the Proposals? The Proposals have three main parts:

Summary

Third parties associated with an employer may find themselves liable to contribute to the employer's occupational pension scheme. Where a pension scheme is in deficit, the Pensions Regulator has powers - so-called 'moral hazard' powers - that can require a third party to give financial support or a specific payment to the pension scheme.

“Aside from their inconsistency with empirical data, proposals to “reform” the Bankruptcy Code must overcome a more basic reality: The current Code works exceedingly well.”
– LSTA Response

One of the primary business restructuring goals is the adjustment of a company’s burdensome obligations.  If a business is going to be reorganized, matching a company’s obligations to its value is key to the rehabilitation and “fresh start” concepts that underpin the Bankruptcy Code.