In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of international comity. However, U.S. bankruptcy courts sometimes disagree over the precise statutory authority for granting such relief, because the provisions of chapter 15 are not particularly clear on this point in all cases.

In In re Arcapita Bank B.S.C., 2021 WL 1603608 (Bankr. S.D.N.Y. Apr. 23, 2021), the U.S. Bankruptcy Court for the Southern District of New York addressed the interaction between purported setoff rights arising under investment agreements governed by Islamic law and the Bankruptcy Code's safe harbors protecting the exercise of non-debtors' rights under financial contracts.

Madoff

The motivation for the recent insolvency law reforms is to give insolvent companies breathing space to try to reorganise their affairs and allow viable businesses to continue to trade

With the threat of increased insolvencies as an effect of the COVID-19 pandemic remaining very real, the construction sector needs to be aware of the impact of changes to insolvency laws.

Changes to insolvency laws in the UK, Australia and Singapore may affect how parties deal with the termination of construction contracts where one party to the agreement is insolvent.

So far this year, fewer European and American businesses have encountered financial distress that required either bankruptcy or restructuring procedures than in the same period in 2020. This decline occurred despite the ongoing economic impact of COVID-19.

The COVID-19 pandemic shook the global real estate and hospitality industry as lockdowns were put in place across the globe. The sudden and unexpected lack of footfall caused revenues in physical centers such as restaurants, shopping malls and hotels to plummet, compounding existing structural inefficiencies and accelerating the speed of change for many businesses.

It is generally recognized that a bankruptcy court has the power—either equitable or statutory—to recharacterize a purported debt as equity if the substance of the transaction belies the labels the parties have given it. A ruling handed down by the U.S. Bankruptcy Court for the Southern District of New York provides a textbook example of such a recharacterization. In In re Live Primary, LLC, 2021 WL 772248 (Bankr. S.D.N.Y. Mar.

In Stream TV Networks, Inc. v. SeeCubic, Inc., 2020 WL 7230419 (Del. Ch. Dec. 8, 2020), the Delaware Court of Chancery held that the assets of Stream TV Networks, Inc. ("Stream"), an insolvent Delaware-incorporated 3-D television technology company, could be transferred to an affiliate of two of Stream's secured creditors in lieu of foreclosure without seeking the approval of Stream's shareholders under section 271 of the General Corporation Law of Delaware ("DGCL") or Stream's certificate of incorporation.

On April 19, 2021, the U.S. Supreme Court declined to hear the appeal of a landmark 2019 decision issued by the U.S. Court of Appeals for the Second Circuit regarding the applicability of the Bankruptcy Code's safe harbor for certain securities, commodity, or forward contract payments to prevent the avoidance in bankruptcy of $8.3 billion in payments made to the shareholders of Tribune Co. as part of its 2007 leveraged buyout ("LBO").

BUSINESS RESTRUCTURING REVIEW VOL. 20 • NO. 3 MAY–JUNE 2021 IN THIS ISSUE 1 First Impressions: Third Circuit Scuttles Triangular Setoff in Bankruptcy 4 Should Equitable Mootness Bar Appeals Only of Chapter 11 Plan Confirmation Orders? 7 Debate Intensifies on Substantial Contribution Claims in Chapter 7 Cases 10 Bankruptcy Court Recharacterizes Purported Loan as Equity 14 In Brief: “Failing” Delaware Corporation Can Transfer Assets to Creditors in Lieu of Foreclosure Without Shareholder Consent 15 U.S.