In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of international comity. However, U.S. bankruptcy courts sometimes disagree over the precise statutory authority for granting such relief, because the provisions of chapter 15 are not particularly clear on this point in all cases.

Almost a year has now passed since the Corporate Insolvency and Governance Act 2020 (CIGA) first entered force on 26 June 2020. According to the Explanatory Notes that accompanied CIGA, “the overarching objective of [the Act] is to provide businesses with the flexibility and breathing space they need to continue trading during this difficult time”. To this end, CIGA introduces a number of permanent and temporary amendments to the UK’s insolvency landscape which are aimed at ensuring businesses can maximise their chances of survival against the backdrop of the COVID-19 pandemic. 

With the fallout from the pandemic hitting many businesses, those considering insolvency should look at the broad gamut of options on offer to avoid winding up the company. Matthew Padian, managing associate, explains.

Will the end of the moratorium on evicting commercial tenants in March prompt more CVAs?

With the moratorium on forfeiture of commercial leases for non-payment of rent set to expire on 31 March, many tenants will be working out how to pay their rents. Using a company voluntary arrangement (CVA) may offer one way of compromising rents if landlords decline to negotiate a rent reduction.

But the road towards a CVA is not without its potholes, and there are two key signs that landlords are growing increasingly savvy when reacting to them.

The EMEA Determinations Committee's recent bankruptcy determination involving Selecta CDS provides additional insight on the types of chapter 15 filings that are likely to trigger Credit Events.

On 29 September 2020 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 came into force. To keep this snippy, we’ll refer to these new Regulations as “CIGAR”.

In Short

The Situation: On August 11, 2020, a Credit Derivatives Determinations Committee for EMEA ("DC") unanimously determined that the Chapter 15 filing by British retailer Matalan triggered a Bankruptcy Credit Event under standard credit default swaps ("CDS").

The Result: The DC's decision diverged from its only prior decision (involving Thomas Cook) on whether a Chapter 15 petition constituted a Bankruptcy Credit Event.

Assuming the Pizza Express company voluntary arrangement (CVA) follows the approach taken by other casual diners and retailers who have also launched CVAs recently, we can predict with some confidence what the Pizza Express CVA proposal might say.

The first half of 2020 saw a wave of company voluntary arrangements (CVAs) as companies explored their restructuring options against the backdrop of a darkening economic outlook.

Hot off the press, yesterday we learnt a great deal more about the proposed suspension of the UK’s wrongful trading laws with the publication of the Corporate Insolvency and Governance Bill 2019-21.