The Recast Insolvency Regulation 2015/848 governs cross-border insolvency proceedings within the European Union. It provides in particular for the opening of the main proceedings by the jurisdiction of the member state where the centre of the debtor’s main interests is located (presumed to be the place of its registered office) and the opening of one or more secondary proceedings in the member states where the debtor possesses an establishment.
Substantial reforms to Regulation (EC) 1346/2000 on insolvency proceedings were made under Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast) (the “Recast Insolvency Regulation“). The Recast Insolvency Regulation applies to insolvency proceedings commenced on or after 26 June 2017.
The European regulation of 20 May 2015 on insolvency proceedings (the “Insolvency Regulation”) came into force a year ago, significantly modifying European insolvency law. An ordinance published in November 2017 started the process of adapting French law to reflect the requirements of the Insolvency Regulation. A decree of 5 June 2018 (the “Decree”) modifying the regulatory part of Book VI of the French Code de Commerce is the final piece in the jigsaw.
Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the “Recast Insolvency Regulation“) applies to insolvency proceedings opened after 26 June 2017. Ordinance of 2 November 2017 (the “Ordinance“) amended the French Code de commerce to reflect the Recast Insolvency Regulation by inserting a new Title IX into Book VI.
Judicial remedies against the opening of main insolvency proceedings
On July 6-7, 2017, Craig Jalbert, in his capacity as Trustee for F2 Liquidating Trust, filed approximately 187 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code (depending on the nature of the claims). In certain instances, the Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
On June 15, 2017, Curtis R. Smith, as Liquidating Trustee of the Hastings Creditors’ Liquidating Trust, filed approximately 69 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548 and 550 of the Bankruptcy Code. The Liquidating Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
On June 13, 2017, The Original Soupman, Inc. and its affiliates (collectively “Debtors” or “Original Soupman”) commenced voluntary bankruptcy proceedings under Chapter 11 of the Bankruptcy Code. According to its petition, Original Soupman estimates that its assets are between $1 million and $10 million, and its liabilities are between $10 million and $50 million.
On May 17, 2017, GulfMark Offshore, Inc. (“GulfMark” or “Debtor”) filed a voluntary petition for bankruptcy relief under chapter 11 of the Bankruptcy Code in the United States District Court for the District of Delaware.
Starting on April 28, 2017, Craig R. Jalbert, as Distribution Trustee of the Corinthian Distribution Trust, filed approximately 122 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 547, 548, 549 and and 550 of the Bankruptcy Code (depending upon the nature of the underlying transactions). The Distribution Trustee also seeks to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.
Whether a claim against company management is direct or derivative is not infrequently disputed in litigation before the Delaware Court of Chancery. This determination becomes important in many contexts, including whether it was necessary for plaintiff to make a pre-suit demand upon the board, whether derivative claims of a company have been assigned to a receiver, or whether such claims have previously been settled in a prior litigation.