In Harrington v. Purdue Pharma L.P., 144 S. Ct. 2071 (2024) (“Purdue”), the Supreme Court held that the Bankruptcy Code does not authorize nonconsensual releases of nondebtors as part of a chapter 11 plan. The Court narrowly read the Code’s language, providing that a plan may “include any other appropriate provision not inconsistent with the applicable provisions of this title,” 11 U.S.C.

The latest amendment to the Slovenian Insolvency Act (Zakon o finančnem poslovanju, postopkih zaradi insolventnosti in prisilnem prenehanju or ZFPPIPP-H), which entered into force in late 2023, introduced the concept of likely or threatening insolvency and additional duties for the company and its management, which were first described in the article Amendment to the Slovenian Insolvency Act brings additional duties to the management and supervisory bodies, published in CEE Legal Matters (

We have previouslyblogged about the section 546(e) defense to a trustee’s avoidance powers under the Bankruptcy Code. A trustee has broad powers to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C. §§ 544, 547, 548.

The proposed EU Directive on the harmonisation of insolvency law aims to establish minimum conditions for exercising avoidance actions in insolvency proceedings in order to protect the bankruptcy estate against unlawful deprivation of assets prior to the opening of insolvency proceedings. In Slovenia, existing contestation rights provide a strict legal framework to prevent such transfers of assets and the proposed Directive is expected to strengthen them.

Scope of avoidance rules

On 1 November 2023, the long-awaited amendment to the Slovenian Insolvency Act (Zakon o finančnem poslovanju, postopkih zaradi insolventnosti in prisilnem prenehanju or ZFPPIPP-H) has entered into force.

We have previously blogged about the section 546(e) defense to a trustee’s avoidance powers under the Bankruptcy Code. A trustee has broad powers to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C. §§ 544, 547, 548. Section 546(e), however, bars avoiding certain transfers, including a “settlement payment . . . made by or to (or for the benefit of) . . . a financial institution [or] a transfer made by or to (or for the benefit of) a . . . financial institution . . . in connection with a securities contract.” 11 U.S.C. § 546(e).

Federal law assigns to U.S. district courts original jurisdiction over all cases under Title 11 (the Bankruptcy Code) and all civil proceedings arising under Title 11 or arising in or relating to Title 11. See 28 U.S.C. § 1334(a), (b). Federal law permits each U.S. district court to refer such cases and civil proceedings to bankruptcy courts, and district courts generally do so. But bankruptcy courts, unlike district courts, are not courts under Article III of the Constitution, and are therefore constrained in what powers they may constitutionally exercise.

On 7 December 2022, the European Commission published a proposal for a Directive of the European Parliament and of the Council harmonising certain aspects of the insolvency law. The intention of this Directive Proposal is to make insolvency proceedings more predictable and efficient within the EU.

Most importantly, the Directive Proposal introduces a mandatory inclusion of a new restructuring instrument to Slovenian insolvency law: what is known as a ‘pre-pack proceeding’, which is a fast-track liquidation proceeding that:

Section 544(b)(1) of the Bankruptcy Code enables a trustee to step into the shoes of a creditor and avoid a transfer “of an interest of the debtor in property” that an unsecured creditor could avoid under applicable state law. See 11 U.S.C. § 544(b)(1). Thus, for example, if outside of bankruptcy a creditor could avoid a transaction entered by a debtor as a fraudulent transfer, in bankruptcy, the trustee acquires the power to avoid such a transaction.

We have blogged a fewtimes about the Supreme Court’s decision in Siegel v. Fitzgerald and its implications.