Asset freeze measures enacted by the United Kingdom against designated persons (DPs) can, under certain circumstances, extend to entities “owned or controlled” by DPs. To date, there have been few—and at times partly contradictory—English court cases addressing the “ownership and control” criteria under the UK sanctions regime. The latest judgment in Hellard v OJSC Rossiysky Kredit Bank sought to reconcile the previous guidance provided by the courts in the Mints and Litasco cases.
R (on the application of Palmer) (Appellant) v Northern Derbyshire Magistrates’ Court and another (Respondents) [2023] UKSC 38
On appeal from: [2021] EWHC 3013
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 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.
An insolvency moratorium first introduced during the COVID-19 pandemic applies to nearly all Russian legal entities, individuals, and sole entrepreneurs, and bans the commencement of insolvency proceedings against Russian obligors.
Now that HMRC has become a preferential creditor for certain debts, other creditors – such as suppliers – could lose out.
Under the Finance Act 2020, from 1 December 2020, HMRC became a preferential creditor in insolvency proceedings. This may have significant impact on what’s left for other creditors.
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.
The Corporate Insolvency and Governance Act (CIGA) came into force on 26 June 2020, introducing significant reforms intended to provide breathing space for companies during the coronavirus pandemic.
These measures may be a welcome relief to some struggling companies. However, they could prove problematic for suppliers, who will need to tread especially carefully when dealing with distressed or insolvent companies.
What has CIGA changed?
In response to the coronavirus (COVID-19) pandemic, Russia has changed its bankruptcy laws to provide for a moratorium on bankruptcies and a freeze on certain transactions. While the situation is dynamic, these amendments are relevant for ongoing or potential transactions in Russia, as well as a party’s ability to enforce pledges and other types of security interests or to seek other remedies against Russian companies.