Yes, says the First Circuit. The First Circuit recently affirmed the District Court’s decision to deny a group of bondholders’ (the “Bondholders”) motion to have a trustee appointed for the Employees Retirement System of the Government of the Commonwealth of Puerto Rico (the “System”) under section 926 of the Bankruptcy Code. Section 926 of the Bankruptcy Code allows a court to appoint a trustee to pursue avoidance actions in Chapter 9 cases.

Disagreeing with the much-critiqued SDNY opinion in Enron, the SDNY bankruptcy court disallowed claims brought by secondary transferees because the original claimants allegedly received millions of dollars in fraudulent transfers and preferences from the Debtors that have not been repaid. Deepening the district spilt on the nature of Section 502(d) of the Bankruptcy Code, the Court held that the defense barring fraudulent transfer-tainted claims focuses on claims—not claimants—and cannot be “washed clean” by a subsequent transfer in the secondary market.

The Federal Ministry of Justice and Consumer Protection (BMJV) is currently finalizing the law to mitigate the consequences of the COVID-19 pandemic in civil, insolvency, and criminal proceedings with extraordinary commitment. It shall be adopted less than two weeks after the beginning of the extensive restrictions on public life and the economy in Germany due to the COVID-19 pandemic.

A central element of the law is to facilitate the raising of debt capital in order to support companies in the current situation. For this purpose:

Mit außerordentlichem Engagement treibt das Bundesministerium für Justiz und Verbraucherschutz (BMJV) aktuell das Gesetz zur Abmilderung der Folgen der COVID-19-Pandemie im Zivil-, Insolvenz- und Strafverfahrensrecht voran. Weniger als zwei Wochen nach Beginn der weitreichenden Einschränkungen des öffentlichen Lebens und auch der Wirtschaft in Deutschland aufgrund der COVID-19-Pandemie soll es nun verabschiedet werden.

The Federal Ministry of Justice and Consumer Protection (BMJV) now implements, with great commitment and unprecedented speed, what it has generally announced on 16 March 2020 (see also The four pillar protective governmental shield for Germany):

The Federal Ministry of Justice and Consumer Protection (BMJV) now implements, with great commitment and unprecedented speed, what it has generally announced on 16 March 2020: 

Das Bundesministerium für Justiz und Verbraucherschutz (BMJV) lässt nun mit enormem Einsatz und mit wohl einmaliger Geschwindigkeit seiner vom 16. März 2020 Akündigung Taten folgen (siehe auch: Vier Säulen Schutzschild für Deutschland):

Noch in dieser Woche sollen

The German government announced that it will expand the KfW financing programme.

Confirmation of a Chapter 11 plan generally requires the consent of each impaired class of creditors. A debtor can “cramdown” a plan over creditor dissent, however, as long as at least one class of impaired claims accepts the plan.

The consequences of an order or judgement being final or interlocutory are enormous. An order from an interlocutory order requires leave since these orders are not appealable as of right. In addition, a failure to obtain leave may result in the issue becoming moot. This is especially so when motions to lift the stay are involved: if the motion is denied and is not immediately appealable, by the time the case is concluded, the issues will most likely be moot.