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On September 10, 2024, the U.S. Court of Appeals for the Third Circuit issued its opinion in Wells Fargo Bank, N.A. v. The Hertz Corp. (In re The Hertz Corp.), Case No. 23-1169, 2024 WL 4132132 (3d Cir. Sept.
Alice Eaton Featured at Wharton’s PE and Venture Capital Conference
Restructuring partner Alice Eaton spoke on the panel “Adjusting to a New Era: Redefining Value Creation in Uncertain Times,” as part of the Wharton School of the University of Pennsylvania’s 2024 Private Equity and Venture Capital Conference on March 29. The panel covered the use of innovative financing instruments and structures for investments in distressed assets.
Elizabeth McColm Discusses Women in Restructuring at Winter Bankruptcy Conference
On April 22, 2024, in the chapter 11 cases of GOL Linhas Aéreas Inteligentes S.A.
Election of Joe Graham to Partner
Joe Graham was elected partner in the New York office. This year, Joe played a leading role in the chapter 11 cases of Avaya, Benefytt and Diamond Sports. He regularly advises on out-of-court restructurings, bankruptcy litigation and distressed investments. Joe earned his J.D., magna cum laude, and his B.A. from the University of Notre Dame.
Kelley Cornish Inducted into “M&A Advisor Hall of Fame”
A recent decision of the German Federal Court of Justice (Bundesgerichtshof) has extended the liability of legal advisors in crisis situations.
Background
Under German law, a lawyer may be liable not only to his client, but also to a third party, if the third party has a special interest in the lawyer's performance. The Bundesgerichtshof has clarified that managing directors and even shadow directors may have such a special interest and may claim damages from their company’s legal advisor for breach of duty (Pflichtverletzung).
Under German law, company directors have a statutory duty to file for insolvency once the company has become insolvent or over-indebted. Company directors can be held personally liable for any payments they make after that point of time unless they prove that they exercised reasonable care, skill and diligence. After the German Federal Court of Justice (Bundesgerichtshof) clarified that standard terms and conditions of German D&O insurance contracts cover this directors’ liability, many D&O insurers have tried to find new ways to avoid their coverage.
On December 5, 2022, in In re Global Cord Blood Corp., 2022 WL 17478530 (Bankr. S.D.N.Y. Dec. 5, 2022) (“Global Cord”), the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) denied recognition of a proceeding pending in the Grand Court of the Cayman Islands (the “Cayman Proceeding” and the court, the “Cayman Court”) because it was more like a corporate governance and fraud remediation effort than a collective proceeding for the purpose of dealing with reorganization or liquidation, as Chapter 15 of the Bankruptcy Code requires.
In a ruling issued on 3 March 2022 (IX ZR 78/20) the German Federal Court (BGH) has again raised the requirements for proving that a debtor, when making a payment, intended to disadvantage their creditors.
Background
In a recent judgment on directors’ liability, the Higher Regional Court of Düsseldorf (Oberlandesgericht Düsseldorf) held that startup companies are not deemed to be overindebted if they are receiving adequate finance from their shareholders or third parties.
Background