Background

Following various disputes as to the scope of the collateral given to secured creditors, the debtors and certain of their noteholders jointly proposed a chapter 11. The plan included a rights offering that the consenting noteholders agreed to backstop. These consenting noteholders were granted the right to purchase significant equity of the reorganized debtors at a discount and receive significant premiums for their agreement to backstop the rights offering and support the plan.

Merit Management

In Mission Products Holdings, Inc. v. Tempnology, LLC, the U.S. Supreme Court resolved a question that vexed the lower courts and resulted in a circuit split: does the rejection by a debtor-licensor of a trademark license agreement terminate the licensee’s rights under the rejected license?

It is a well-established principle of bankruptcy law that claims generally crystallize as of the bankruptcy petition date. Of course, section 506(b) of the bankruptcy code allows over-secured, secured creditors to recover post-petition interest and costs, including reasonable legal fees, if their documentation provides them with the right to recover these costs. But what about unsecured creditors – are post-petition legal fees incurred by an unsecured creditor whose contract with the debtor provides for reimbursement of legal fees allowed or not?

Bankruptcy Rule 2004 allows the examination of any entity with respect to various topics, including conduct and financial condition of the debtor and any matter that may affect the administration of the estate. Does a subordination agreement that is silent on the use of Rule 2004 prevent the subordinated creditor from taking a Rule 2004 examination of the senior creditor? Yes, says an Illinois bankruptcy court.

The dialogue is changing yet is the law enabling the practical change Directors need?

Achieving significant cultural shift in any business environment is no easy task, so it’s by no means ground-breaking to declare that after 1 year in operation, it still cannot be said that the new “Safe Harbour” legislation has resulted in a cultural change among directors.

Two United States Bankruptcy Judges for the Southern District of New York recently issued a joint opinion addressing common issues raised by motions to dismiss in two separate adversary proceedings – one pending before Judge Bernstein and the other before Judge Glenn (the “Adversary Proceedings”). The Adversary Proceedings were filed by the debtors in two chapter 11 cases, each involving an Anguillan offshore bank – National Bank of Anguilla (Private Banking Trust) Ltd. and Caribbean Commercial Investment Bank Ltd. (the “Debtor Banks”).

Manley Toys Limited once claimed to be the seventh largest toy company in the world. Due to ongoing litigation and declining sales, it entered into a voluntary liquidation in Hong Kong. On March 22, 2016, the debtor’s appointed liquidators and foreign representatives filed a motion for recognition under chapter 15 of the Bankruptcy Code. The motion was opposed by ASI Inc., f/k/a Aviva Sports, Inc. (“Aviva”) and Toys “R” Us, Inc. (“TRU”).

The Senate Legal and Constitutional Affairs Legislation Committee (“the Committee”) has endorsed the passing of the Bankruptcy Amendment (Enterprise Incentives) Bill 2017 (“the Bill”) in its report dated 21 March 2018.[1]

The Queensland Court of Appeal has upheld an appeal by the liquidators of Linc Energy Limited (In Liquidation) (“Linc”) and given full effect to their disclaimer of contaminated mining property and onerous obligations the subject of an environmental protection order (“EPO”) issued by the Queensland Department of Environment and Science (“DES”).[1]