Introduction
Derivative Standing
Dura Automotive
The Bankruptcy Court's Ruling
The McClatchy Company
Outlook
The practice of conferring "derivative standing" on official creditors' committees to assert claims on behalf of a bankruptcy estate in cases where the debtor or a bankruptcy trustee is unwilling or unable to do so is a well-established means of generating value for the estate from litigation recoveries. However, in a series of recent decisions, the Delaware bankruptcy courts have limited the practice in cases where applicable non-bankruptcy state law provides that creditors do not have standing to bring claims on behalf of certain entities.
On 29 September 2020, the Dutch Senate’s justice committee decided that the Dutch Scheme bill can be dealt with as a formality (hamerstuk) without further debate. It did so after the Dutch Government submitted to the Dutch Senate’s justice committee its memorandum of reply (Memorie van Antwoord) regarding the Dutch Scheme, or to use the full title: the Act on confirmation of private restructuring plans (commonly referred to as the WHOA, after its Dutch acronym). This blog highlights the various topics covered in the memorandum of reply.
On 26 May 2020, the Dutch Parliament’s House of Representatives (Tweede Kamer) adopted the Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord (“WHOA”)). The next step will see the WHOA put to vote in the Senate.
The Situation: In the past few weeks, due to the severe impact of the COVID-19 crisis on non-essential businesses forced to close and terminate employees after filing for chapter 11 protection, bankruptcy courts have been confronted with requests by debtors to temporarily suspend their bankruptcy cases using the courts' equitable powers and a seldom-used provision of the Bankruptcy Code: 11 U.S.C. § 305(a).
In This Issue:
U.S. Supreme Court: Creditors May Immediately Appeal Denials of Automatic-Stay Relief
As mentioned in our earlier blog, the Dutch legislator has prepared a bill – the Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord) – which introduces a framework allowing debtors to restructure their debts outside formal insolvency proceedings (the “Dutch Scheme“).
In McKillen v. Wallace (In re Irish Bank Resolution Corp. Ltd.), 2019 WL 4740249 (D. Del. Sept. 27, 2019), the U.S. District Court for the District of Delaware had an opportunity to consider, as an apparent matter of first impression, whether the U.S. common law "Barton Doctrine" applies extraterritorially. One of the issues considered by the district court on appeal was whether parties attempting to sue a foreign representative in a chapter 15 case must first obtain permission to sue from the foreign court that appointed the foreign representative.
As mentioned in our earlier blog, the Dutch legislator has prepared a bill – the Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord) – introducing a framework that allows debtors to restructure their debts outside formal insolvency proceedings (the “Dutch Scheme“). We expect this highly-anticipated bill to enter into force by this summer.
On 5 July 2019 the Minister of Justice submitted a bill to parliament that will add a new powerful tool to the Dutch restructuring toolbox. The bill on the “Act on the Confirmation of a Private Restructuring Plan” is expected to introduce a serious competitor to the UK’s Scheme of Arrangement and the USA’s Chapter 11. The introduction of the bill will move one step closer on 26 September 2019, when members of the parliament are scheduled to submit their questions and remarks on the bill to parliament’s Standing Committee on Justice and Security.