Although there are occasions when formal insolvency proceedings are unavoidable, there are many cases where a consensual, out-of-court approach is more appropriate and desirable.

We are often engaged to assist creditors, directors and other stakeholders with negotiating standstill agreements or restructuring support agreements to give breathing space to put new terms in place and allow the relevant corporate entity (or group) to continue as a going concern.

We have published a series of articles dealing with directors’ duties in the zone of insolvency.

Federal appellate courts have traditionally applied a "person aggrieved" standard to determine whether a party has standing to appeal a bankruptcy court order or judgment. However, this standard, which requires a direct, adverse, and financial impact on a potential appellant, is derived from a precursor to the Bankruptcy Code and does not appear in the existing statute.

The court-fashioned doctrine of "equitable mootness" has frequently been applied to bar appeals of bankruptcy court orders under circumstances where reversal or modification of an order could jeopardize, for example, the implementation of a negotiated chapter 11 plan or related agreements and upset the expectations of third parties who have relied on the order.

On June 6, 2023, the U.S. Bankruptcy Court for the Southern District of Texas confirmed the chapter 11 plan of bedding manufacturer Serta Simmons Bedding, LLC and its affiliates (collectively, "Serta"). In confirming Serta's plan, the court held that a 2020 "uptier," or "position enhancement," transaction (the "2020 Transaction") whereby Serta issued new debt secured by a priming lien on its assets and purchased its existing debt from participating lenders at a discount with a portion of the proceeds did not violate the terms of Serta's 2016 credit agreement.

Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings have been issued in bankruptcy cases addressing the application of the provision, including application to financial institutions, its preemptive scope, and its application to non-publicly traded securities.

Bankruptcy trustees and chapter 11 debtors-in-possession ("DIPs") frequently seek to avoid fraudulent transfers and obligations under section 544(b) of the Bankruptcy Code and state fraudulent transfer or other applicable nonbankruptcy laws because the statutory "look-back" period for avoidance under many nonbankruptcy laws exceeds the two-year period governing avoidance actions under section 548.

Following the UK Supreme Court decision in Sequana¹ at the end of 2022, the New Zealand Supreme Court has now weighed in on the issue of the duties owed by directors of a company in the zone of insolvency in a long-running case involving the liquidation estate of Mainzeal Property and Construction Limited.²

根据英国最高法院 2022 年底 Sequana¹ 的判决 ，新西兰最高法院在涉及 Mainzeal Property and Construction Limited²清算财产的长期案件中，对破产区公司董事所承担的义务问题进行了权衡及作出有力贡献。

当世界各地的董事们正努力应对各种宏观经济因素带来的困难和不确定时期时，这些决策为董事们应采取哪些保护自己及公司的方法提供了有用且及时的指导。

这可能意味着听取有关停止交易的建议，尝试签订重组支持协议或任命官员提供协助。在开曼群岛，新的重组支持官员制度提供了一个有用的体系，为董事提供休整期，以便在适当的情况下促进和实施可行的计划。

Mainzeal 的最新决定再次提醒大家，公司董事未能采纳建议和采取适当行动可能会导致严重后果。

Mainzeal 决定

The finality of asset sales and other transactions in bankruptcy is an indispensable feature of U.S. bankruptcy law designed to maximize the value of a bankruptcy estate as expeditiously as possible for the benefit of all stakeholders. To promote such finality, section 363(m) of the Bankruptcy Code prohibits reversal or modification on appeal of an order authorizing a sale or lease to a "good-faith" purchaser or lessee unless the party challenging the sale obtains a stay pending appeal. What constitutes "good faith" has sometimes been disputed by the courts.