On September 8, 2022, a three-judge panel in the United States Court of Appeals for the Second Circuit (the “Second Circuit”) reversed the United States District Court for the Southern District of New York (the “District Court”) when it determined that lenders of a syndicated loan facility to Revlon, Inc.
In Matter of J.C. Penney Direct Marketing Services, L.L.C.,1 the United States Fifth Circuit Court of Appeals clarified the extremely deferential standard afforded to a debtor’s “business judgment” decision to reject an unexpired lease under section 365 of the Bankruptcy Code and affirmed the Bankruptcy Court’s ruling allowing rejection of a ground lease notwithstanding allegations of a debtor-sublessor’s bad faith dealings in its negotiations with a sublessee.
Background
Summary
The Supreme Court held that when directors know, or ought to know, that the company is insolvent or bordering on insolvency, or that an insolvent liquidation or administration is probable, they must consider the interests of creditors, balancing them against the interests of shareholders where they may conflict. The greater the company’s financial difficulties, the more the directors should prioritise the interests of creditors.
Background
On July 29, 2022, Laurie S.
On 22 July 2022 and after the judge ordered a delay for more evidence, the English court sanctioned the restructuring plan proposed by Houst Limited (Houst). Houst is an SME that is concerned with the provision of property management services for short-term/holiday lets. Its business was badly affected by the Covid-19 pandemic, meaning it was both cash flow and balance sheet insolvent when proposing the plan.
The Supreme Court of the United States granted certiorari on June 27, 2022, to determine whether section 363(m) of the Bankruptcy Code—concerning appellate review of bankruptcy court sale orders—is jurisdictional or only limits the remedy an appellate court may fashion. This issue has split the circuit courts of appeals. The case is set for oral argument in the October 2022 term.
Cryptoassets continue to be in the spotlight with prices no longer heading ‘to the moon’, the recent high-profile failure of an algorithmic stablecoin and the difficulties experienced by various service providers. This all forms the backdrop to the UK Government’s publication of proposals with respect to managing the failure of systemic digital settlement asset firms.
Overview
On 18 March 2021, the UK Government published its white paper on restoring trust in audit and corporate governance. On 31 May 2022, the Government published its response to the consultation.
On 30 March 2022, the English court sanctioned the most recent restructuring plan proposed by Smile Telecoms Holdings Limited (Smile).
Pandemic related restrictions on winding up companies come to an end.