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
Following the substantial impact of the COVID-19 pandemic on global trade and business operations in the UAE, the Government of the UAE has taken measures to protect businesses facing financial difficulty. Among these measures has been a mechanism that provides relief to businesses in financial distress because of the pandemic within the framework of the UAE Federal Bankruptcy Law No. 9 of 2016 (the Bankruptcy Law).
On 28 June 2021, the UK High Court declined to sanction Hurricane Energy Plc’s restructuring plan. This was the first time a restructuring plan seeking to achieve a debt-for-equity swap against the wishes of existing shareholders had come before the court.
Background
Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.
The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were:
Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.
The two most significant temporary measures for companies facing financial difficulties as a result of the COVID-19 pandemic were:
There has been much debate in recent years around the use made of certain UK restructuring tools – the company voluntary arrangement and, more recently, the new restructuring plan – to restructure commercial property leases. Commercial tenants argue that compromise is necessary to address high fixed costs that are no longer sustainable, but landlords have often been critical of the approach taken. This debate has become more acute in the context of the pandemic, as many High Street businesses subject to mandatory closure have built up significant rent arrears that need to be addressed.
The financial loss and the uncertainty caused by the pandemic continues to affect business globally, and an increase in corporate insolvency is widely anticipated. Arbitration is an effective dispute resolution mechanism, but a counterparty entering insolvency proceedings can be disruptive. We recently wrote about insolvency being one of the key trends in international arbitration in 2021.
A new bill, which the UK Government introduced to Parliament on 12 May 2021, seeks to extend the existing directors’ disqualification regime to the directors of dissolved companies.
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.