A bedrock principle underlying chapter 11 of the Bankruptcy Code is that creditors, shareholders, and other stakeholders should be provided with adequate information to make an informed decision to either accept or reject a chapter 11 plan. For this reason, the Bankruptcy Code provides that any "solicitation" of votes for or against a plan must be preceded or accompanied by stakeholders' receipt of a "disclosure statement" approved by the bankruptcy court explaining the background of the case as well as the key provisions of the chapter 11 plan.

In Short

The Situation: The U.S. Supreme Court considered whether § 363(m) of the Bankruptcy Code, which limits a party's ability to undo an asset transfer made to a good-faith purchaser in a bankruptcy case, is jurisdictional.

The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a "fresh start" for debtors and to maximize the value of the bankruptcy estate for the benefit of all stakeholders. However, the Bankruptcy Code establishes strict requirements for the assumption or assignment of contracts and leases.

The Coronavirus (Recovery and Reform) Scotland Act was passed by the Scottish Government on 28 June 2022 and enacted on 10 August 2022 (the "Act"). It makes two key changes to insolvency and diligence in Scotland.

Bankruptcy floor limit

If you have fraudulently obtained Covid-19 financial support, such as a Bounce Back Loan, you must be pretty worried by recent headlines that show company directors being disqualified, fined and jailed.

It would appear that the trend we reported in the rising numbers of Scottish corporate insolvencies is showing no let up.

The recent English High Court decision of Re Glam and Tan Ltd [2022] EWHC 855 (Ch) highlights the ways in which a director can be found liable, as well as the reasons why they may be relieved of responsibility for breaches of section 212 of the Insolvency Act 1986, which penalises delinquent directors and officers.

The legislation

Following the Coronavirus pandemic, the Scottish Government introduced two key Acts. The Coronavirus (Scotland) Act 2020 and the Coronavirus (Scotland) (No.2) Act 2020 - together, these Acts made two significant changes to personal insolvency in Scotland.

The 2020 Coronavirus (Scotland) Acts

Madoff

On April 19, 2021, the U.S. Supreme Court declined to hear the appeal of a landmark 2019 decision issued by the U.S. Court of Appeals for the Second Circuit regarding the applicability of the Bankruptcy Code's safe harbor for certain securities, commodity, or forward contract payments to prevent the avoidance in bankruptcy of $8.3 billion in payments made to the shareholders of Tribune Co. as part of its 2007 leveraged buyout ("LBO").