The vast majority of corporate debt issuances are made pursuant to a trustee structure. This approach affords investors the advantage of uniformity of treatment and facilitates collective action, as opposed to the alternative 'fiscal agency' or direct issuance structure. But what happens when an individual investor in a global note structure seeks to take direct enforcement action against an issuer?
Executive Summary
Battered by the COVID-19 pandemic and the decline in passengers travelling to Hong Kong, Hong Kong Airlines (HKA) has become the latest carrier to undergo a debt restructuring. Its restructuring plan was sanctioned by the English court on 9 December 2022 and its scheme of arrangement was sanctioned by the Hong Kong court on 14 December 2022.
In summary:
Summary
The Hong Kong Court and the US Bankruptcy Court have made conflicting comments regarding the discharge of New York law-governed debt by a foreign scheme of arrangement, where that scheme is the subject of recognition under Chapter 15 of the US Bankruptcy Code.
In a case of importance to foreign representatives of foreign debtors seeking the assistance of US courts pursuant to chapter 15 of the Bankruptcy Code, the US Court of Appeals for the Second Circuit has held that the debtor eligibility requirements of section 109(a) of the US Bankruptcy Code apply in cases under chapter 15 as they would in cases under other chapters of the Bankruptcy Code. The decision in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), Case No. 13-612 (2d Cir. Dec.
On April 16, 2013, in Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.),1 the US Court of Appeals for the Second Circuit issued an important decision informing fundamental concepts of cross-border insolvency law as implemented pursuant to Chapter 15 of the Bankruptcy Code.
The U.S. Supreme Court has ruled that a secured creditor cannot be denied its right to “credit bid”—i.e., to offset the amount of its debt against the purchase price of assets, rather than bidding in cash—in sales of collateral undertaken in connection with plans of reorganization under Chapter 11 of the Bankruptcy Code. In so ruling, the Court resolved a widely publicized split of authority among the Circuit Courts of Appeal, and rejected the Third Circuit’s ruling in the Philadelphia Newspapers case.1
On April 19, 2012, the Lehman bankruptcy court handed down its decision on the long-pending motion to dismiss filed by JPMorgan Chase Bank, N.A., in response to Lehman Brothers Holdings Inc.’s $8.6 billion avoidance action against it. The action sought to recover the value of collateral taken by JP Morgan in its role as principal clearing bank to Lehman in the run-up to the Lehman insolvency.
Did you know...
it has been argued that a factoring arrangement over invoices of a company could be challenged as a charge over book debts and thus is void against liquidators of the company unless registered under section 80 of the Companies Ordinance.
The Bankruptcy Court for the Southern District of New York has held that a cross-affiliate netting provision in an ISDA swap agreement is unenforceable in bankruptcy. In the SIPA proceedings of Lehman Brothers Inc. (LBI), UBS AG (UBS) sought to offset UBS’s obligation to return excess collateral to LBI against claims purportedly owed by LBI to UBS subsidiaries, UBS Securities and UBS Financial Services.