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Texas District Court: Bankruptcy sale break-up fee satisfied both business judgment test and administrative expense standard

BUSINESS RESTRUCTURING REVIEW VOL. 21 • NO. 5 SEPTEMBER–OCTOBER 2022 1 IN THIS ISSUE 1 Texas District Court: Bankruptcy Sale Break-Up Fee Satisfied Both Business Judgment Test and Administrative Expense Standard 2 Lawyer Spotlight: Gregory M.

USA, Delaware, Texas, Insolvency & Restructuring, Litigation, Jones Day, Insolvency, Federal Deposit Insurance Corporation (USA), Delaware Supreme Court
Fifth Circuit: District Court Improperly Referred Bankruptcy Appeal to Magistrate Judge for Final Determination

Federal district courts, with the consent of the parties, are authorized by statute to refer "civil matter[s]" to magistrate judges for the purpose of conducting all proceedings and entering a judgment in the litigation. In the case of an appeal to a district court from a bankruptcy court, however, this statutory authority arguably conflicts with another statutory provision dictating that appeals from a bankruptcy court order or judgment be heard by a "district court" or a "bankruptcy appellate panel." This apparent conflict was recently addressed by the U.S.

USA, Insolvency & Restructuring, Litigation, Jones Day, US Congress, Supreme Court of the United States, Fifth Circuit
Divided Ninth Circuit Rules That Unimpaired Unsecured Creditors of a Solvent Debtor May Be Entitled to Post-Petition Interest at Contract or State Default Rates

In Short

The Situation: Bankruptcy courts have split on what rate of post-petition interest unimpaired creditors of a solvent debtor are entitled to receive. Bankruptcy courts have variously ruled that such creditors were entitled to the contractual rate of interest, interest at the federal judgment rate (about the rate on a one-year Treasury bill) as of the bankruptcy petition date, or an equitable rate. Another possibility is that no interest is payable at all.

USA, Insolvency & Restructuring, Litigation, Jones Day, Supreme Court of the United States, Ninth Circuit
A Tale of Fraud and Overzealousness: How the Judicial Shrinkage of “Initial Transferee” Saved an Innocent Immigrant From a Corrupt Car Dealer and a Troublesome Trustee

What happens when a shady businessman transfers $1 million from one floundering car dealership to another via the bank account of an innocent immigrant? Will the first dealership’s future chapter 7 trustee be allowed to recover from the naïve newcomer as the “initial transferee” of a fraudulent transfer as per the strict letter of the law? Or will our brave courts of equity exercise their powers to prevent a most grave injustice?

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Sanctions Risk and Preserving Distressed Assets in the United Kingdom

In Short

The Situation: As businesses continue to grapple with realising the value of business and assets which are potentially impacted by sanctions related to Russia's war in Ukraine, an English company recently utilised an insolvency process to seek court approval for a proposed divestment.

United Kingdom, Insolvency & Restructuring, Litigation, Trade & Customs, Jones Day, Insolvency, Office of Financial Sanctions Implementation (UK)
An Update on Insolvency in the Australian Construction Industry

WHITE PAPER An Update on Insolvency in the Australian Construction Industry The construction sector in Australia has long been affected by insolvency and broader liquidity issues. In the last year, construction companies accounted for 26% of businesses that entered into insolvency, and insolvencies in the construction sector more than doubled. This year, contractors have been further squeezed by inflation, supply chain issues and labour market shortages. As the federal government has wound back its COVID-19 economic stimulus packages, further collapses seem inevitable.

Australia, Construction, Insolvency & Restructuring, Projects & Procurement, Jones Day, Supply chain, Liquidation, Power of attorney, Coronavirus, Insolvency, Australian Securities and Investments Commission, Corporations Act 2001 (Australia)
Recent Developments at the Intersection of Bankruptcy and Environmental Law

Retired U.S. Bankruptcy Judge Robert E. Gerber once observed that “issues as to the interplay between environmental law and bankruptcy are among the thorniest on the litigation map.” Difficulties navigating this interplay largely stem from the inherent conflict between the goals of bankruptcy and environmental laws, with the former aimed at providing debtors with a fresh start, while the latter cast a broad net to hold parties (even some innocent parties) responsible for past harm to the environment.

USA, Environment & Climate Change, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Supply chain, Mediation, US Environmental Protection Agency, US Congress, Supreme Court of the United States
Business Restructuring Review Vol. 21 No. 4 July-August 2022

BUSINESS RESTRUCTURING REVIEW VOL. 21 • NO. 4 JULY–AUGUST 2022 1 IN THIS ISSUE 1 U.S.

USA, Insolvency & Restructuring, Litigation, Jones Day, Due diligence, Coronavirus, US Department of Justice, US Department of Labor, FERC, US Congress, Supreme Court of the United States
A Foreign Entity May be Subject to U.S. Bankruptcy Court Jurisdiction Simply by Utilizing a U.S. Bank Account in a Transaction with Another Foreign Entity

A foreign (non-U.S.) company can be dragged unwillingly into a U.S. bankruptcy case if the bankruptcy court has “personal jurisdiction” over the company.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Bankruptcy, United States bankruptcy court
A Foreign Entity May be Subject to U.S. Bankruptcy Court Jurisdiction Simply by Utilizing a U.S. Bank Account in a Transaction with Another Foreign Entity

A foreign (non-U.S.) company can be dragged unwillingly into a U.S. bankruptcy case if the bankruptcy court has “personal jurisdiction” over the company.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, United States bankruptcy court