As discussed in our prior blog entitled “New York’s Sovereign Debt Restructuring Proposals,”[1] three bills were introduced in the New York state legislature to overhaul the way sovereign debt restructurings are handled in New York. Those bills sought to implement a comprehensive mechanism for restructuring sovereign debt, limit recovery on certain sovereign debt claims, and amend the champerty defense.

The first half of 2023 witnessed the failure of three financial institutions in quick succession—Silicon Valley Bank (March 10, 2023), Signature Bank (March 12, 2023), and First Republic Bank (May 1, 2023). This was the first time three financial institutions failed in such a compressed time period since the Great Recession of 2008.

The saga of the first Ultra Petroleum Corp. chapter 11 cases appears to have finally come to an end. Numerous articles have been written on the tortured history of whether certain creditors of Ultra Petroleum are entitled to payment of their contractually mandated Make-Whole Amount and default rate of interest.

The Supreme Court in Sevilleja v Marex Financial Ltd [2020] UKSC 31 has brought much needed clarity to the legal basis and scope of the so-called ‘reflective loss’ principle. The effect of the decision is a ‘bright line’ rule that bars claims by shareholders for loss in value of their shares arising as a consequence of the company having suffered loss, in respect of which the company has a cause of action against the same wrong-doer.

A recent decision of the High Court of New Zealand provides helpful guidance for insolvency practitioners on how aspects of the voluntary administration regime should operate in the context of the COVID-19 pandemic.

On 30 March 2020, the board of directors of EncoreFX (NZ) Limited resolved to appoint administrators to the company. By then, New Zealand was already at Level 4 on the four-level alert system for COVID-19.

In the past several years, the United States has seen a tidal wave of retail sector chapter 11 cases. The end result for most of those cases has been going out of business and liquidation sales. On March 11, 2020, Modell’s Sporting Goods commenced its chapter 11 cases seeking to follow a similar path taken by other retailers by closing all 153 sporting goods stores in a controlled liquidation. Unfortunately for Modell’s, the COVID-19 crisis hit the United States just as Modell’s commenced its liquidation.

The UK Court of Appeal has held that legal privilege outlasts the dissolution of a company in Addlesee v Dentons Europe LLP [2019] EWCA Civ 1600.

Legal advice privilege applies to communications between a client and its lawyers. The general rule is that those communications cannot be disclosed to third parties unless and until the client waives the privilege.

The High Court in DHC Assets Ltd v Arnerich [2019] NZHC 1695 recently considered an application under s 301 of the Companies Act (the Act) seeking to recover $1,088,156 against the former director of a liquidated company (Vaco). The plaintiff had a construction contract with Vaco and said it had not been paid for all the work it performed under that contract.

Regan v Brougham [2019] NZCA 401 clarifies what is needed to establish a valid guarantee.

A Term Loan Agreement was entered into whereby Christine Regan and Mark Tuffin lent $50,000 to B & R Enterprises Ltd. Rachael Dey and Bryce Brougham were named as Guarantors. Bryce Brougham was the only guarantor to sign the agreement. The Company was put into liquidation and a demand made against the Guarantor.

The guarantor argued that the guarantee was not enforceable based on the following:

The Court of Appeal in 90 Nine Limited v Luxury Rentals NZ Limited [2019] NZCA 424 allowed an appeal from a creditor in respect of an application to liquidate the respondent over a failure to pay a statutory demand.