Domestic Procedures

On 31 August 2022, the Cayman Islands restructuring officer regime came into force.[1] The regime was introduced to provide increased flexibility to implement a restructuring of Cayman Islands insolvent companies, including by providing the breathing space of an automatic moratorium that operates from the date of presentation of the restructuring petition.

On 28 March 2024, the BVI Court granted the Joint Liquidators of Three Arrows Capital Ltd (in liquidation) ("3AC") sanction to make an interim distribution of up to US$100 million of 3AC's assets to its creditors in BVIHC(COM)2022/0119 Russell Crumpler and Christopher Farmer (as Joint Liquidators of Three Arrows Capital Ltd (in Liquidation)) v Three Arrows Capital Ltd (in Liquidation).

Last month the Delaware Chancery Court sent a clear message to Delaware companies that failure to strictly comply with the Delaware Assignment for the Benefit of Creditors (“ABC”) statute will result in severe consequences, including dismissal.

The UK Financial Conduct Authority (FCA has issued a consultation about proposed changes to its Guidance for Insolvency Practitioners. The aim is to clarify existing guidance and provide more information to insolvency practitioners (IPs) on how to deal with regulated firms.

In my most recent blog post, I provided some tips for creditors who find themselves in the Subchapter V arena. This is somewhat of a follow-up to that one.

In a seminal judgment of the Court of Appeal of England & Wales in the case of In the Matter of AGPS Bondco plc (Adler), the Court of Appeal overturned the first instance judgment of the High Court of England and Wales sanctioning a restructuring plan between AGPS Bondco plc (Plan Company) and its creditors. In doing so, it restated and clarified the law in England & Wales insofar as it relates to restructuring plans. Post-Adler, the High Court has sanctioned a restructuring plan in the case of In the Matter of Project Lietzenburger Straße Holdco S.A.R.L.

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.

As seen in the recent proliferation of bankruptcy cases seeking a structured dismissal or conversion after a successful sale, debtors constantly seek creative and efficient ways to wind up a case, including through a traditional plan of liquidation. Yet, as discussed below, debtors must ensure that any proposed voting procedures for a plan comply with section 1126 of the Bankruptcy Code, or are at least supported by, or supportable with, prior precedent.

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.