In brief

On 28 April 2020, it was presented before the Chamber of Senators an initiative of reform to the Insolvency and Bankruptcy Law that pretends to add an emergency insolvency proceeding. Such proceeding foresees that companies that are financially affected by an emergency (such as the COVID-19 pandemic, for example) can request and be subject to an automatic declaration of insolvency.

Among the main proposals of additions, there is the creation of a new insolvency proceeding with the following characteristics:

In brief

The Federal Judiciary Council issued on April 27, 2020, the General Resolution 8/2020 on the Work Plan and Contingency Measures in the Jurisdictional Entities as a consequence of the Covid-19 Virus (the "Resolution").

The Resolution establishes that during the period from May 6 to May 31, 2020, only new requests, claims, ancillary proceedings and appeals, i.e. not previously filed, will be processed in urgent cases, regardless of whether they are filed physically or electronically.

The Supreme Court issued its much-anticipated ruling yesterday in the First Circuit case of Mission Product Holdings, Inc. v. Tempnology, LLC, resolving a circuit split that had developed on “whether [a] debtor‑licensor’s rejection of an [executory trademark licensing agreement] deprives the licensee of its rights to use the trademark.” And it answered that question in the negative; i.e., in favor of licensees.

When it comes to offsets, bankruptcy law provides for two distinct remedies: (1) setoff and (2) recoupment.

Setoff allows a creditor to reduce the amount of prepetition debt it owes a debtor with a corresponding reduction of that creditor’s prepetition claim against the debtor. The remedy of setoff is subject to the automatic stay, as well as various conditions under § 553 of the Bankruptcy Code — including that it does not apply if the debts arise on opposite sides of the date on which the debtor’s case was commenced.