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House Judiciary Committee to Markup Nondebtor Release Prohibition Act of 2021

On Wednesday, November 3, the House Judiciary Committee approved legislation on a party-line vote that could drastically reshape chapter 11 restructurings, particularly in cases involving significant tort liability. The bill, the Nondebtor Release Prohibition Act of 2021 (the “NRPA”) is sponsored by Judiciary Chairman Jerry Nadler (D-NY), Oversight Chairman Rep. Carolyn Maloney (D-NY), and Rep. David Cicilline (D-RI), who chairs the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law, which has jurisdiction over bankruptcy law-related issues.

USA, Insolvency & Restructuring, Litigation, Hogan Lovells
Liquidations and arbitrations: the consequences of the definition of "debts" in section 345 of the Companies Act 61 of 1973 for bringing a liquidation application

Interim costs awards in arbitration proceedings are not often the precursors to winding up applications. However, it may happen that if such an award of costs is not paid, the possibility of winding up the non-paying party may arise. This possibility leads to the following question, "Is a bill of costs drafted pursuant to an arbitration award and taxed by the taxing master of the High Court a "debt" for purposes of section 345 of the Companies Act 61 of 1973?"

South Africa, Company & Commercial, Insolvency & Restructuring, Tax, Hogan Lovells
New policy on the appointment of insolvency practitioners – could this be a turning point in the South African insolvency industry?

The Minister of Justice and Constitutional Development (the Minister) has recently determined a policy on the appointment of insolvency practitioners, which was published in theGovernment Gazette No 37287 on 7 February 2014 (the policy). This policy, once it commences, will replace all the previous policies and guidelines that are currently being utilised by the Master's offices to appoint insolvency practitioners and its stated intention is to "form the basis of the transformation of the insolvency industry".

South Africa, Insolvency & Restructuring, Hogan Lovells, Liquidation
Section 133 of the Companies Act 71 of 2008 and interruption of execution

Consider the following commonly encountered scenario: A creditor had instituted litigation proceedings against Company X and obtained a default judgment against it. Pursuant to the judgment the creditor issued a writ of execution, but is now faced with the situation where an affected person has brought an application in terms of section 131(1) of the Companies Act 71 of 2008 (the Act) to place Company X under supervision and to commence business rescue proceedings. What is the effect on the creditor?

South Africa, Insolvency & Restructuring, Litigation, Hogan Lovells, Liquidation