As they say, what one hand giveth, the other hand taketh. In its recent decision in In re MPM Silicones, LLC, the U.S. Court of Appeals for the Second Circuit addressed make-whole premiums and cramdown rates of interest (among other issues not addressed here), issuing rulings that will impact creditors and debtors alike.

In the recent case of BTI 2014 LLC v Sequana SA & others [2016] EWHC 1686, the High Court has held for the first time that a dividend can be challenged as a transaction entered into at an undervalue within the meaning of section 423(1) of the Insolvency Act 1986 (the “IA”).

The Facts

The facts of the case are long and complex but for present purposes the pertinent facts are as follows.

Arjo Wiggins Appleton Limited (now Windward Prospects Limited) (“AWA”) was a wholly owned subsidiary of Sequana SA (“SSA”).

A recent decision of the Slovak Courts suggest that if main proceedings have been opened in one member state and the debtor has assets in Slovakia, the insolvency practitioner in the main proceedings must act quickly and sell those assets before secondary proceedings are opened in Slovakia, otherwise he runs the risk of losing the assets to the secondary estate. Legal title to the assets must have passed to the buyer before the secondary proceedings are opened; it is not enough just for contracts to have been exchanged.

Supreme Court Judgment dated 10 March 2016 (STS 151/2016)

The judgment of the Supreme Court analyses the objective scope of extension of the liability for obligations and debts for which, as appropriate, the director of a company should be liable and, more specifically, the scope of "the corporate obligations subsequent to the occurrence of the legal ground for dissolution".

Is a debtor required to pay default rate interest when it reinstates a loan under a plan of reorganization? According to a recent Eleventh Circuit Court of Appeals decision, In re Sagamore Partners, Ltd., 2015 U.S. App. LEXIS 15382 (Aug. 31, 2015), the answer depends upon the underlying loan documents and applicable non-bankruptcy law.

In a decision released on March 29, 2011, CDX Liquidating Trust v. Venrock Assocs., et al., 2011 U.S. App. LEXIS 6390 (7th Cir. March 29, 2011), the United States Court of Appeals for the Seventh Circuit, reversing the district court’s ruling, held that a director’s disclosure of a conflict, in and of itself, is insufficient to protect that director from liability for breach of fiduciary duty or disloyalty arising from that conflict.

The term “frenemy” – a combination of the words friend and enemy – has emerged from modern vernacular to describe someone who is simultaneously a partner and an adversary. The term is perhaps perfectly emblematic of the restructuring process where various constituents make and break alliances in an effort to steer the restructuring process. In so doing, the lines between friend and enemy are often blurred or altered during the course of the restructuring.

On November 4, 2010, the United States Bankruptcy Court for the Northern District of Illinois certified the appeal of debtors River Road Hotel Partners, LLC, et al. of the court’s Order Denying Debtors’ Bid Procedures Motion (the Order) entered October 5, 2010. In its Order, the bankruptcy court expressly denied the debtors’ attempts to prevent their secured creditors from credit bidding in a proposed sale of assets under a chapter 11 plan.

On October 21, 2010, the New York Court of Appeals (the Appeals Court), New York’s highest appellate court, addressed two appeals, and then issued an important ruling regarding the parameters of the affirmative defense of in pari delicto in suits against outside auditors, holding that the doctrines of in pari delicto and imputation are a complete bar to recovery when the corporate wrongdoer’s actions are imputed to the company.

The Doctrines of In Pari Delicto and Imputation

The case of Hull v Campbell serves as a reminder of an outmoded debt recovery procedure that needs to be modernised.