In a decision delivered on 7 June 2024 (2024TALCH02/00950) (the Decision), the Luxembourg District Court provided for substantive clarifications regarding article 10 of the Luxembourg Law of 7 August 2023 on the continuation of businesses and modernisation of insolvency law (the Restructuring Law). This article empowers the Court to appoint judicial agents (mandataires de justice) in case of serious and aggravated misconduct (manquements graves et caractérisés) by the debtor or its corporate bodies, threatening the continuity of the business.

Following the entry into force of the law of 7 August 2023 (the New Insolvency Law), the Luxembourg district court sitting in commercial matters (the Court) issued on 22 November 2023 the first decision opening judicial reorganisation proceedings (JRP) (Numéro du rôle: TALCH02/01416).

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What is the impact on the double Luxco and the Luxembourg share pledges?

Luxembourg bolsters its position for the structurings of international investments with the introduction of new tools for bankruptcy prevention. The existing and new financial collateral arrangements maintain their bankruptcy insolvency proceedings remote status, preserving the benefit and popularity of the double Luxco structure and the related enforcement of Luxembourg share security.

The long-awaited new Luxembourg law on business preservation and modernisation of bankruptcy law voted by the Luxembourg Parliament on 19 July 2023 (the Law) implementing EU Directive 2019/1023 of 20 June 2019 contains a range of new preventive reorganisation procedures, notably (i) conservatory measures (appointment of a conciliator), (ii) an out-of-court reorganization procedure by mutual agreement (réorganisation par accord amiable) and (iii) judicial reorganisation proceedings (JRP).

In a recent opinion arising from the Chapter 11 proceedings of Arcapita Bank, Judge Alvin Hellerstein of the US District Court for the Southern District of New York affirmed a bankruptcy court decision denying safe-harbor protection to Shari’a-compliant Murabaha investment agreements.¹ Specifically, the district court held that the Murabaha agreemen

The active trading of loans made to a borrower that has become unable to repay in full (known as non-performing loans or distressed debt) has been a feature of the North American and European loan markets for a number of years.

On 4 November 2021, the High Court of Australia heard the arguments put forward by Wells Fargo Trust Company, National Association and Willis Lease Finance Corporation, together Wells Fargo, and the administrators (the Administrators) of the Virgin Australia Airlines group, which entered into administration on 20 April 2020. The dispute primarily concerned who should pay for the redelivery of four aircraft engines capable of being used on B737s (the Engines) to the lease redelivery location in Florida.

In what could prove to be a landmark judgment, a Dubai court ruled earlier this month that the directors of a company in bankruptcy should be personally liable for the company’s debts, to the sum of almost AED 450,000,000 (around US$ 122,000,000).

Article 144 of Federal Law No.9 of 2016 (the “Bankruptcy Law”) allows a court to order directors to pay a bankrupt company’s debts where:

In bankruptcy as in federal jurisprudence generally, to characterize something with the near-epithet of “federal common law” virtually dooms it to rejection.

In January 2020 we reported that, after the reconsideration suggested by two Supreme Court justices and revisions to account for the Supreme Court’s Merit Management decision,[1] the Court of Appeals for the Second Circuit stood by its origina