On 27 February 2024, the High Court sanctioned a restructuring plan (the Plan) proposed by CB&I UK Limited (CB&I), part of the global McDermott construction and engineering group (the Group). This is the first English restructuring plan to be approved after the Court of Appeal judgment in Adler (see our Alert) and follows the guidance in that case.
Background
Bankruptcy law has always been an interesting area to practice and study in China. Having nominally a “socialist market economy” as per its Constitution, China allows its private sector to operate relatively freely within regularly re-defined boundaries but has a strong state-owned sector that comprises about half of the entire economy. Adding constant concerns about social stability in the country of 1.4 billion people, the rules for companies going into insolvency must be a careful balance between capitalist “freedom to fail” principles and governmental control over the economy.
On 23 January 2024, the Court of Appeal overturned the High Court's sanction of Adler Group's (Adler) restructuring plan (the Plan) (see our alert). This much anticipated judgment provides clarity on the court's discretion to sanction a plan where there are dissenting classes of creditors.
Background
The Plan envisaged:
在中国，破产法一直是一个有趣的实践和研究的领域。自从社会主义市场经济被写入我国宪法，我国就允许私营企业在定期不断重新界定的范围内相对自由地经营，同时约占整个经济一半的国有企业也展现出其雄厚的实力。在这个拥有14亿人口的国家，社会稳定问题一直备受关注，因此企业破产制度必须在资本主义“允许失败的自由”原则和政府对经济的管控之间保持谨慎的平衡。
中国的破产法从业人员一直热切期待新的并且能够对公司何时以及如何进行破产清算与重整产生影响的法律法规出台。中华人民共和国第十四届全国人民代表大会常务委员会第七次会议于2023年12月29日审议并通过了新修订的《中华人民共和国公司法》（简称“新公司法”），将自2024年7月1日起正式实施。本文将从破产实务的角度对新公司法进行解读。
Bankruptcy law has always been an interesting area to practice and study in China. Having nominally a “socialist market economy” as per its Constitution, China allows its private sector to operate relatively freely within regularly re-defined boundaries but has a strong state-owned sector that comprises about half of the entire economy. Adding constant concerns about social stability in the country of 1.4 billion people, the rules for companies going into insolvency must be a careful balance between capitalist “freedom to fail” principles and governmental control over the economy.
The Court of Appeal has recently referred to established case law that the court will only interfere with the act of an officeholder “if he has done something so utterly unreasonable and absurd that no reasonable man would have done it”.
While the judge in the lower court had not made any error of law, on the facts there were identifiable flaws in the judge's reasoning that the trustees' decision not to join in the proceedings was perverse.
The judge had failed to recognise that:
Bed Bath & Beyond, the home goods retailer, has filed bankruptcy under Chapter 11 and plans to conduct liquidation sales and close all of its brick-and-mortar stores by June 30, as reported by The New York Times. The retailer points to an inability to adjust to the growth of online shopping as a reason for its downfall.
After a weekend that saw the tech ecosystem unite to fight for its future, on Monday 13 March 2023, the Bank of England (the Bank) effected the sale of Silicon Valley Bank UK Ltd (SVB UK) to HSBC. It used the resolution powers for stabilising failing banks granted by the Banking Act 2009 which were introduced following the 2008/9 financial crisis.
Resolution powers
On February 13, 2023, Ultra Petroleum Corporation (“Ultra”) filed a petition for a writ of certiorari with the US Supreme Court seeking review of the Fifth Circuit’s October 2022 ruling that, in solvent-debtor cases, debtors must pay unsecured creditors applicable contractual make-whole premiums and postpetition interest at contractual default rates in order for such unsecured creditors to be considered unimpaired.
In a January 2023 opinion,1 the Southern District of New York Bankruptcy Court overseeing the bankruptcy case of Latin American airline Avianca and certain of its affiliates sanctioned over 150 of the airline’s Brazilian and Columbian creditors who had filed proofs of claim in the bankruptcy case finding t