If the overarching theme of 2024 was continued uncertainty (Ten litigation trends to watch for 2024), 2025 already looks set to be another unpredictable year. Various doom-laden economic forecasts indicate that 2025 will be a challenging year for the UK economy.

On 28 March 2020, business secretary Alok Sharma announced plans to reform insolvency law to add new restructuring tools, including:

As reviewed previously, the impact on Covid-19 losses will result in a steep increase in insurance claims under business interruption, public liability, product liability, employer’s liability, asset management, directors and officers, professional liability, errors and omissions, and marine insurance policies.

The economic fallout from the COVID-19 pandemic will leave in its wake a significant increase in commercial chapter 11 filings. Many of these cases will feature extensive litigation involving breach of contract claims, business interruption insurance disputes, and common law causes of action based on novel interpretations of long-standing legal doctrines such as force majeure.

The Chancellor has committed to doing “whatever it takes” to save businesses and workers and, as part of a raft of measures, has pledged to pay 80% of staff kept on by employers.

U.S. Bankruptcy Judge Dennis Montali recently ruled in the Chapter 11 case of Pacific Gas & Electric (“PG&E”) that the Federal Energy Regulatory Commission (“FERC”) has no jurisdiction to interfere with the ability of a bankrupt power utility company to reject power purchase agreements (“PPAs”).

The Supreme Court this week resolved a long-standing open issue regarding the treatment of trademark license rights in bankruptcy proceedings. The Court ruled in favor of Mission Products, a licensee under a trademark license agreement that had been rejected in the chapter 11 case of Tempnology, the debtor-licensor, determining that the rejection constituted a breach of the agreement but did not rescind it.

Few issues in bankruptcy create as much contention as disputes regarding the right of setoff. This was recently highlighted by a decision in the chapter 11 case of Orexigen Therapeutics in the District of Delaware.

How do you spot a zombie company?

Zombie companies walk amongst us. They shuffle along, failing to realise that they are undead, relying on the inaction of creditors and low interest rates to mask their fundamental lack of profitability, poor growth prospects and inability to service their debts. Denied a swift, clean demise, they endure a twilight existence that deprives their living competitors of capital and opportunities.

The judicial power of the United States is vested in courts created under Article III of the Constitution. However, Congress created the current bankruptcy court system over 40 years ago pursuant to Article I of the Constitution rather than under Article III.