In 2019, Congress enacted the Small Business Reorganization Act, which created subchapter V within chapter 11 of the Bankruptcy Code. Congress’ intent was to create a more cost-efficient and streamlined restructuring process for small businesses by modifying certain provisions of chapter 11 for debtors with claims below a specific debt cap. In particular, because creditors typically have smaller claims against these small businesses, the new subchapter takes into account the likelihood that there will be no or minimal meaningful creditor participation.
While there is a statutory requirement to register most forms of security granted by limited companies incorporated in the UK at Companies House, it is worth remembering that there is no statutory requirement for the holder of registered security to inform Companies House if, e.g., the debt secured by a registered charge has been satisfied.
Following our previous alert, in which we highlighted an issue with entries relating to registered security maintained at Companies House being incorrectly updated to indicate that they had in fact been discharged without the aware
In recent months, there have been a few changes regarding MVLs, which we set out below as a helpful reminder to practitioners.
Statements of Solvency
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S89 of the Insolvency Act 1986 sets out the requirements for a statutory declaration of solvency where it is proposed that a company is wound up on a solvent basis.
Over the past week, reports have emerged about filings that have been made at Companies House marking a charge as satisfied, without the company's or relevant lender's knowledge.
There were rumours last week, which were simply that, because Companies House had not publicly announced any issue, but, as we have seen over the weekend and is now widely reported in the news, it appears that there have been at least 800 erroneous filings.
In this note, we provide a high-level overview of key restructuring cases from last year in the US, Asia Pacific and Australia and consider the outlook in 2024 for restructuring transactions.
US
Publicly, Diamond Finance Co. (“Diamond”) provided car loans to individuals with less-than-stellar credit. While Diamond did have “some actual business,” its purpose “quickly became a front to lure unsuspecting investors.”
The Fifth Circuit recently ruled that a debtor can sell a preferential transfer action under Bankruptcy Code section 363 to a purchaser that is not a representative of the bankruptcy estate. Briar Cap. Working Fund Cap., L.L.C. v. Remmert (In re S. Coast Supply Co.), No. 22-20536, 2024 U.S. App. LEXIS 1417 (5th Cir. Jan. 22, 2024).
A common defense to a fraudulent transfer claim in bankruptcy concerning a securities transaction is the “safe harbor” defense under section 546(e) of the Bankruptcy Code. In a unique twist, a post-confirmation trust in Delaware recently argued that the safe harbor defense should not be available if the underlying transaction was illegal under the law where the debtor/transferor was incorporated.
Changes are afoot to the statutory regime governing special administrations for regulated water companies (the SAR) following the publication of a suite of new legislation.
Impact of the changes on pension trustees