As discussed in our prior blog entitled “New York’s Sovereign Debt Restructuring Proposals,”[1] three bills were introduced in the New York state legislature to overhaul the way sovereign debt restructurings are handled in New York. Those bills sought to implement a comprehensive mechanism for restructuring sovereign debt, limit recovery on certain sovereign debt claims, and amend the champerty defense.

The first half of 2023 witnessed the failure of three financial institutions in quick succession—Silicon Valley Bank (March 10, 2023), Signature Bank (March 12, 2023), and First Republic Bank (May 1, 2023). This was the first time three financial institutions failed in such a compressed time period since the Great Recession of 2008.

Crypto firm bankruptcies and resulting disruption in the crypto ecosystem will continue to exacerbate liquidity and regulatory concerns in this space. Signs of contagion are evident as prices of almost every cryptocurrency type have halved in recent months. Since all participants supporting the crypto ecosystem are at risk, managing that risk is critical.

Fund managers should be prepared on multiple fronts, as the following examples illustrate:

Everything, everywhere, all at once is our risk thesis for 2023, but one must not forget about concentration risk. This issue has rocketed up diligence agendas for LPs and GPs alike as the collapse of Silicon Valley Bank proved it really was the bank for venture capital.The entry of SVB into receivership on March 10, 2023 highlighted just how central it had become to U.S.

The saga of the first Ultra Petroleum Corp. chapter 11 cases appears to have finally come to an end. Numerous articles have been written on the tortured history of whether certain creditors of Ultra Petroleum are entitled to payment of their contractually mandated Make-Whole Amount and default rate of interest.

In the past several years, the United States has seen a tidal wave of retail sector chapter 11 cases. The end result for most of those cases has been going out of business and liquidation sales. On March 11, 2020, Modell’s Sporting Goods commenced its chapter 11 cases seeking to follow a similar path taken by other retailers by closing all 153 sporting goods stores in a controlled liquidation. Unfortunately for Modell’s, the COVID-19 crisis hit the United States just as Modell’s commenced its liquidation.

In our work with international companies supplying goods to the UK, we see a number of common issues arising regularly. In our previous articles, we explained what happens if a UK customer hits financial difficulties and the powers of insolvency practitioners. In this last of five articles based on the five elements of the Wu Xing, we take the theme of Earth and explain the options to get paid by an insolvent customer, completing the business as usual cycle of supply and payment and thereby restoring balance to your business.

在与向英国供货的国际公司合作的过程中，我们发现了一些常见问题。在上一篇文章中，我们研究了客户可能面临的破产程序类型。在“五行”系列第四篇文章中，我们围绕“火”元素来说明破产执业者在进入破产程序时拥有的重大权力：调查不当行为，并将资产收回统一偿还债权人。

火：破产执业者对债权人欺诈性交易的重大权力

破产执业者(不论是清算人或管理人)可以向法院申请撤销在公司进入破产程序前进行的特定交易。通过这种方式，可以收回资产或资金，统一向债权人偿付。下列情形属于“先前的”或“可审查”的交易：

1. 公司的资产或财产被低价出售；
2. 公司在进入破产程序前给予某债权人优先权，使其处于比其他债权人更有利的地位；
3. 公司订立了敲诈性信贷交易（交易条款有严重的敲诈性）；
4. 公司设立了无效浮动抵押，即为已发放的贷款或已提供的货物及服务的成本提供担保；
5. 公司订立的交易具有欺诈债权人的明确目的，即：使公司的资产脱离破产执业者和债权人的控制范围。

不同类型的可审查交易有不同的时间要求。例如，低价出售必须发生在公司进入破产程序前的两年内。

In our work with international companies supplying goods to the UK, we see the same issues arising regularly. In Part 3, we examined the types of insolvency process a customer may be subject to. In this fourth of five articles based on the five elements of the Wu Xing, we take the theme of Fire and explain the significant powers that arise for the insolvency practitioner on the entry into insolvency: to investigate propriety and recover assets to the central pool to pay creditors.

Fire: the great powers of the insolvency practitioner regarding transactions defrauding creditors

在与向英国供货的国际公司合作的过程中，我们发现了一些常见问题。在前几篇文章中，我们阐释了英国客户遭遇财务困难时会发生的情况以及破产执业者的权力。在“五行”系列最后一篇文章中，我们以“土”元素为主题，探讨获得破产客户付款的方法，正常完成交易中的供货和付款从而恢复供应商的业务平衡。

土：如何确保供应商在客户破产的情况下避免损失并使自己处于最佳境地，以及如何在此种情况下获得付款

如果没有所有权保留条款(或合同中的任何其他保护条款——见本系列篇目一，破产公司的债权人有如下选择。

1. 债权人应在破产程序中提交债权证明，并提供销售合同、交付凭证和未付款账单等证据。除了提交债权证明，在破产管理和清算程序中，债权人通常被禁止对公司提起诉讼。

2. 如果当前破产公司的董事订立低价交易以欺诈债权人(例如将资产置于债权人的控制范围之外)，受到该交易侵害的人可向法院申请许可对交易提出异议。

3. 如果公司的董事或高管作出任何关于公司对供应商有偿付能力的陈述，供应商依据该陈述继续与客户进行交易，而该董事知道或应当知道该陈述不实，在这种情况下，该董事个人可能须为这一不实陈述承担责任（又称欺诈侵权）。当然，这只有在董事拥有足够的个人资产来偿还债务的情况下才有用。