In a welcome clarification for administrators, the UK Supreme Court in the recent case of R (on the application of Palmer) v Northern Derbyshire Magistrates’ Court[1], held that an administrator appointed under the Insolvency Act 1986 (IA 1986) is not an “officer” of the company for the purposes of section 194(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
Whilst commonplace in the U.S., uptier transactions in which a borrower teams up with a subset of creditors to issue new “super priority” debt by amending or exchanging existing debt documents, have not been widely used in Europe.
However, with increasing macro economic pressures and financial market instability, we may see more European borrowers taking advantage of flexibility in cov-lite debt documentation to implement liability management transactions as an alternative to, or even as part of, more formal restructurings.
On December 5, 2022, in In re Global Cord Blood Corp., 2022 WL 17478530 (Bankr. S.D.N.Y. Dec. 5, 2022) (“Global Cord”), the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) denied recognition of a proceeding pending in the Grand Court of the Cayman Islands (the “Cayman Proceeding” and the court, the “Cayman Court”) because it was more like a corporate governance and fraud remediation effort than a collective proceeding for the purpose of dealing with reorganization or liquidation, as Chapter 15 of the Bankruptcy Code requires.
In this client alert we set out some of the key lessons from the recent judgment in ABT Auto Investments Ltd v Aapico Investment Pte Ltd [2022] EWHC 2839 (Comm), which considers the validity of appropriation as an enforcement power pursuant to Regulation 17 of the Financial Collateral Arrangements (No. 2) Regulations 2003 (“FCARs”), the duty imposed on a collateral-taker by Regulation 18 of the FCARs in connection with the valuation of a collateral subject to appropriation, and provides useful guidance on what is “commercially reasonable” in this context.
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There are distinct advantages to investors sitting on the boards of their portfolio companies, not least their ability to look after their investment and work toward maximising their return. The human capital provided by investor directors can be invaluable in driving efficiencies and creating growth opportunities. The interests of investors, investor directors, and the company will generally be aligned in seeking the success of the business.
On August 5, 2021, the Eighth Circuit reversed a district court’s decision to dismiss a confirmation order appeal as equitably moot.[1] The doctrine of equitable mootness can require dismissal of an appeal of a bankruptcy court decision – typically, an order confirming a chapter 11 plan – on equitable grounds when third parties have engaged in significant irreversible transactions
On October 5, 2021, the Tenth Circuit joined the Second Circuit in concluding statutory fee increases that applied only to debtors filing for bankruptcy in judicial districts administered by the United States Trustee Program (the “US Trustee” or the “UST Program”) violated the U.S.
This update summarises the latest jurisprudence on insolvent schemes of arrangement (schemes) and restructuring plans (RPs), and provides an overview of the key themes that are emerging in this area.
Key Concepts and Notes
As a matter of practice, chapter 11 plans and confirmation orders routinely discharge administrative expense claims, including those that arise after confirmation of a plan but before its effective date. The Court of Appeals for the Third Circuit (the “Third Circuit”) recently affirmed the bankruptcy court’s statutory authority to do so in Ellis v. Westinghouse Electric Co., LLC, 2021 WL 3852612 (3d Cir. Aug. 30, 2021).