Much discussion has been had recently about the fact that cryptocurrencies (tokens and coins) do not fit neatly into a generally accepted financial asset classification. The value of most cryptocurrencies is not pegged to any tangible commodity or fiat currency.
In bankruptcy parlance, the lookback period does not look good for the crypto industry. In the last 90 days, the cryptocurrency markets have suffered huge losses, and in the last 14 days, two major players have sought bankruptcy protection. During the prior 365 days, nearly three trillion dollars of value has been stripped from the digital wallets of cryptocurrency investors, and the industry has been forced to eliminate thousands of jobs.
News outlets and industry publications have been publishing information about recent “crypto winter” bankruptcies. In order to understand the impact of these bankruptcies as well as how they may impact your investments, it is important to understand what is currently known about these recent filings.
Three Arrows Capital Liquidation and Bankruptcy
This week’s TGIF considers a recent case where the Supreme Court of Queensland rejected a director’s application to access an executory contract of sale entered into by receivers and managers on the basis it was not a ‘financial record’
Key Takeaways
This week’s TGIF looks at the decision of the Federal Court of Australia in Donoghue v Russells (A Firm)[2021] FCA 798 in which Mr Donoghue appealed a decision to make a sequestration order which was premised on him ‘carrying on business in Australia' for the purpose of section 43(1)(b)(iii) of the Bankruptcy Act 1966 (Cth) (Act).
Key Takeaways
This week’s TGIF considers an application to the Federal Court for the private hearing of a public examination where separate criminal proceedings were also on foot.
Key takeaways
This week’s TGIF looks at a recent decision of the Victorian Supreme Court, where a winding up application was adjourned to allow the debtor company to pursue restructuring under the recently introduced small business restructuring reforms.
Key takeaways
The Consolidated Appropriations Act of 2021 (the CAA), which President Trump signed into law on December 27, 2020, amends several provisions of the Bankruptcy Code. While a number of the amendments are applicable only to small businesses (e.g., businesses eligible to file under the new small-business subchapter of the Bankruptcy Code and/or businesses eligible to receive PPP loans), several others have more general application, as discussed below.
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Amendments of More General Application
In the United States, in a typical plain vanilla lending arrangement, if a counterparty files for bankruptcy, an automatic stay of enforcement actions is imposed that would prevent a lender from (i) foreclosing on the property of the debtor, (ii) terminating contracts with the debtor, (iii) commencing or continuing certain enforcement actions against the debtor or its property and/or (iv) setting off amounts owed under such arrangements (in each case unless a motion is filed and granted in the related bankruptcy case).