Until the recent decisions of the Full Court of the Federal Court of Australia in Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) [2021] FCAFC 64 (Badenoch) and Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns
The Treasury has released a consultation paper on changes to improve creditors’ schemes of arrangement in Australia (the Consultation Paper).[1] The main proposal in the Consultation Paper is the consideration of a broad automatic moratorium, available to companies proposing a creditors’ schem
In the recent case of Re Hydrodec Group Plc [2021] NSWSC 755 (Hydrodec) the Supreme Court of New South Wales (NSW Supreme Court or Court) rejected an application by a non-operating holding company, Hydrodec Group Plc (the Company), for recognition of its United Kingdom (UK) debtor-in-possession Part A1 moratorium process (Part A1 Moratorium) and relief from a winding up application being made against the Company in Australia.
The Third Circuit recently held, in a case from the Energy Future Holdings bankruptcy, that a losing stalking horse bidder can provide sufficient value to the debtor’s estate to receive an administrative claim for a break-up fee and expenses. In re Energy Future Holdings Corp., 990 F.3d 728, 748 (3rd Cir. 2021). This represents an expansive view of potential administrative claims related to those costs, providing bidders significant potential protections for their bids.
Brazos Electric Power Cooperative recently filed for Chapter 11 relief in the U.S. Bankruptcy Court for the Southern District of Texas, weeks after the February ice storm severely disrupted Texas’s electricity supply and prices. Brazos filed for bankruptcy in part to shield its member cooperatives and consumers from liability for invoices totaling over $2.1 billion from the Electric Reliability Council of Texas.
On Oct. 27, 2020, Judge Marvin Isgur for the U.S. Bankruptcy Court for the Southern District of Texas held that (1) a make-whole premium was not interest or unmatured interest and thus not subject to disallowance, (2) a make-whole claim was enforceable as liquidated damages under New York law and (3) the solvent debtor exception survived the enactment of the Bankruptcy Code and the Noteholders were entitled to postpetition interest at the contractual default rate.
The Australian chapter of GRR’s Asia-Pacific Restructuring Review 2021, authored by Herbert Smith Freehills, is now available and reproduced below.
This latest edition covers major Australian legislative developments, transactions and case law relating to restructuring and insolvency in Australia over the past 12 months including:
Legislation
- Temporary COVID-19 insolvency law amendments
- Anti-phoenixing amendments to the Corporations Act
Key restructurings
We are pleased to announce the publication of the third edition of the Herbert Smith Freehills Guide to Restructuring, Turnaround and Insolvency, Asia Pacific.
Against a backdrop of the COVID-19 pandemic and the resulting economic downturn, we are seeing companies and lenders respond to a new and challenging business environment. The challenges associated with this new environment are further exacerbated as the influencing factors change in nature and intensity.
The Australian Federal Government has announced significant insolvency law reforms that will affect small businesses with liabilities of less than $1 million. The reforms are expected to commence on 1 January 2021 and will introduce, among other measures, a new debt restructuring process and liquidation pathway for small businesses which the Government intends to be simpler, more flexible and more efficient than existing processes.
In brief
The Australian Federal Government has announced the temporary amendments to insolvency and corporations laws will be extended until 31 December 2020 in light of the continuing challenges of COVID-19.
In brief