On June 13, 2016, the U.S. Supreme Court upheld lower court rulings declaring unconstitutional a 2014 Puerto Rico law, portions of which mirrored chapter 9 of the Bankruptcy Code, that would have allowed the commonwealth’s public instrumentalities to restructure a significant portion of Puerto Rico’s bond debt (widely reported to be as much as $72 billion). In Commonwealth v. Franklin Cal. Tax-Free Tr., 2016 BL 187308 (U.S.

The English Court refused an application by Liquidators to stay English proceedings pending the outcome of similar proceedings in the US.

The Joint Liquidators of a Luxembourg company ("the Company") applied to stay English proceedings that they had brought against private equity investors ("the Defendants") until similar proceedings in the US had been resolved, or for three months to enable the Liquidators to raise finance for the litigation.

The English Court granted recognition of Chapter 11 proceedings in relation to a company that was incorporated in the UK but had its centre of main interests ("COMI") in the United States, confirming that the Directors were foreign representatives for the purpose of the Cross Border Insolvency Regulations 2006 ("the Regulations").

Short stories

Amendments to the Czech Insolvency Act 2016

Saudi Arabia takes out $10 billion in bank loans

Further to our update in November 2014, there has been a further decision in relation to Fairfield Sentry Limited, the largest feeder fund that invested into the fraudulent Bernard L. Madoff Investment Securities.

The Companies Court has set out the requirements necessary to serve out of the jurisdiction under the Practice Direction on Insolvency Proceedings.

One of the prerequisites to confirmation of any chapter 11 plan is that at least one “impaired” class of creditors must vote in favor of the plan. This requirement reflects the basic (but not universally accepted) principle that a plan may not be imposed on a dissident body of stakeholders of which no class has given approval. However, it is sometimes an invitation to creative machinations designed to muster the requisite votes for confirmation of the plan.

Over a third of South West pubs (33%) and restaurants (38.4%) are at heightened risk of insolvency in the next 12 months, according to research by R3, the insolvency trade body.

However, agricultural businesses in the South West have demonstrated increased strength since this time last year with 17% of business at risk, representing a 9.6% decrease in the proportion since February 2015.  

Alan Bennett, Chair of R3 in the South West and Partner at Ashfords LLP, comments:

Simona Kornhaas v Thomas Dithmar (Case C-594/14)

The ECJ have ruled that a director of an English company that had entered into insolvency proceedings in Germany is liable to reimburse the company under German law for payments made after the company became insolvent.