On 31 October 2023, Federal Law No. 51 of 2023 Promulgating the Financial and Bankruptcy Law (the Bankruptcy Law) was published in the United Arab Emirates (UAE) Official Gazette, repealing the prior federal law on bankruptcy (Federal Law No. 9 of 2016, the Prior Law) and significantly developing the bankruptcy regime in the UAE.

On October 17, 2022, Justice Andrea Masley of the NY Supreme Court issued a decision and order denying all but one of the motion to dismiss claims filed by Boardriders, Oaktree Capital (an equity holder, term lender, and “Sponsor” under the credit agreement), and an ad hoc group of lenders (the “Participating Lenders”) that participated in an “uptiering” transaction that included new money investments and roll-ups of existing term loan debt into new priming debt that would sit at the top of the company’s capital structure.

On October 14, 2022, the Fifth Circuit issued its decision in Ultra Petroleum, granting favorable outcomes to “unimpaired” creditors that challenged the company’s plan of reorganization and argued for payment (i) of a ~$200 million make-whole and (ii) post-petition interest at the contractual rate, not the Federal Judgment Rate. At issue on appeal was the Chapter 11 plan proposed by the “massively solvent” debtors—Ultra Petroleum Corp. (HoldCo) and its affiliates, including subsidiary Ultra Resources, Inc.

On 4 and 5 May 2021, the Supreme Court heard an appeal in BTI 2104 LLC v Sequana SA and others [2022] UKSC 25 and this week it gave its judgment. The length of the time taken to issue the judgment reflects both the complexity of the issues involved and the importance of the questions raised for company law in the UK.

On July 6, Delaware Bankruptcy Court Judge Craig T. Goldblatt issued a memorandum opinion in the bankruptcy cases of TPC Group, Inc., growing the corpus of recent court decisions tackling “uptiering” and other similar transactions that have been dubbed by some practitioners and investors as “creditor-on-creditor violence.” This topic has been a hot button issue for a few years, playing out in a number of high profile scenarios, from J.Crew and Travelport to Serta Simmons and TriMark, among others.

The legal market in Scotland has changed over the last year, although perhaps not to the extent that anyone would have predicted. Firms have, in general terms, coped well with remote working and are beginning to cope well with hybrid working too. Traditional streams of work have been maintained and while some practice areas, such as insolvency and restructuring, have been quieter than anticipated, that has not had a significant impact on the bottom line. So, what can we expect in 2022?

1. Insolvencies will rise – even if we don’t experience the “tsunami”

We all know 2020 made an impact – and as we look at the year ahead, there are a few repercussions of the incredible strain placed on businesses that are likely to come into the limelight as a result. While there are some global trends in litigation – like litigation funding and class actions - some Scotland specific trends are also worth highlighting. With that in mind, here are the five key things for litigators to watch in the year ahead:

1) Frustration and leases in Scots law

One of the temporary measures that was not extended was the disapplication of the wrongful trading rules of section 214 of the Insolvency Act 1986 as regards the personal liability of company directors. The discontinuation of the temporary protection has been criticised by business and most recently by the Institute of Directors (IoD) which commented that "Failing to extend the suspension of wrongful trading rules was a mistake. Without this protection, the pressure is on directors to simply shut up shop when faced with difficulty". Is that concern justified?

On August 26, 2020, the Court of Appeals for the Third Circuit held that the Bankruptcy Code does not require subordination agreements to be strictly enforced in order for a court to confirm a cramdown plan, so long as the plan does not discriminate unfairly.

For litigators the most important provision is the extension of the restrictions on the use of statutory demands and winding up petitions until 31 December 2020. The Act, of course, provides that no winding up petition can be presented on the basis of a statutory demand during the relevant restricted period and that where a winding up petition is presented (by a creditor on any basis) a court must be satisfied that coronavirus has not had a "financial effect" on the company before the presentation of the petition.