The recent High Court decision in Re Petropavlovsk Plc [2022] EWHC 2097 (Ch) considers the interaction of UK insolvency procedure and the sanctions regime imposed on Russia. 

Background 

Administrators were appointed to the English holding company of Russian gold mining group, Petropavlovsk Plc, in July 2022. The holding company was not sanctioned but sanctions had affected its ability to refinance and to pay its debts as they fell due.

In Re Swiss Cottage [2022] EWHC 1495 (Ch), junior creditors argued that administrators appointed to two companies had exceeded their powers and breached their duties when selling two properties.

Background

On 7 July 2022 the UK government launched a consultation on the implementation of two model laws adopted by the United Nations Commission on International Trade Law (UNICTRAL): the Model Law on Recognition and Enforcement of Insolvency-Related Judgments and the Model Law on Enterprise Group Insolvency. The government claims that the consultation signals the UK's 'ongoing commitment to mutual cooperation and international best practice' in cross-border insolvencies.

Background

The court sanctioned one of two potential schemes of arrangement for Amigo Loans Ltd (Amigo) and approved a plan that provided for two possible outcomes.

Background

Amigo provided guarantor loans to customers with poor credit scores. Amigo owed customers and the Financial Ombudsman Service £375 million for customer complaints and was insolvent.

The High Court has sanctioned the restructuring plan of ED&F Holdings Ltd, providing further clarity on the exercise of its discretion to sanction a plan using cross-class cram down.

Background

At the convening hearing, the court ordered that five creditor and two member class meetings be held. All but one of the creditor classes approved the plan by large majorities.

Sanction hearing

In Shameeka Ien v. TransCare Corp., et al. (In re TransCareCorp.), Case No. 16-10407, Adv. P. No. 16-01033 (Bankr. S.D.N.Y. May 7, 2020) [D.I. 157], the Bankruptcy Court for the Southern District of New York recently refused to dismiss WARN Act claims against Patriarch Partners, LLC, private equity firm (“PE Firm“), and its owner, Lynn Tilton (“PE Owner“), resulting from the staggered chapter 7 bankruptcies of several portfolio companies, TransCare Corporation and its affiliates (collectively, the “Debtors“).

Joining three other bankruptcy courts, Judge Thuma of the District of New Mexico recently held that the rules issued by the Small Business Administration (“SBA“) that restrict bankrupt entities from participating in the Paycheck Protection Program (“PPP“) violated the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, P.L. 115-136 (the “CARES Act”), as well as section 525(a) of the Bankruptcy Code.

The Southern District of New York recently reminded us in In re Firestar Diamond, Inc., et al., Case No. 18-10509 (Bankr. S.D.N.Y. April 22, 2019) (SHL) [Dkt. No. 1482] that equitable principles in bankruptcy often do not match those outside of bankruptcy. Indeed, bankruptcy decisions often place emphasis on equality of treatment amongst all creditors and are less concerned with inequities to individual creditors.

Introduction

In Wells Fargo Bank, N.A., f/b/o Jerome Guyant, IRA v. Highland Construction Management Services, L.P. et al., Nos. 18-2450-52 (4th Cir. March 17, 2020), the Fourth Circuit Court of Appeals recently upheld that a borrower’s indirect economic interests in a limited liability company (LLC) were not assigned to a lender under a conveyance in a security agreement assigning mere membership interests, pursuant to Virginia state law.

Facts