A secured creditor's right to "credit bid" the amount of its allowed claim in a bankruptcy sale of its collateral is an important creditor protection codified in section 363(k) of the Bankruptcy Code. Even so, a ruling recently issued by the U.S.

Whether a contract is "executory" such that it can be assumed, rejected, or assigned in bankruptcy is a question infrequently addressed by the circuit courts of appeals. The U.S. Court of Appeals for the Third Circuit provided some rare appellate court-level guidance on the question in Spyglass Media Group, LLC v. Bruce Cohen Productions (In re Weinstein Company Holdings LLC), 997 F.3d 497 (3d Cir. 2021).

The Italian government has postponed again the entry into force of Legislative Decree No. 14 dated 12 January 2019 (the "Insolvency Code"), taking into account the COVID-19 impact on the socio-economic scenario and the framework set forth by Directive (EU) 2019/1023.

By Law Decree No. 118 dated 24 August 2021 (the "Law Decree"), the Italian government has postponed the entry into force of the Insolvency Code, which provides for an in-depth reform of the Italian insolvency law.

The Situation: In Homaidan v. Sallie Mae, Inc., et al., the U.S. Court of Appeals for the Second Circuit recently affirmed that certain types of private student loans are not "obligation[s] to repay funds received as an educational benefit, scholarship, or stipend" that are exempt from discharge in bankruptcy absent an undue hardship.

In Short

The Situation: The Full Court of the Federal Court has changed industry practice in Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) [2021] FCAFC 64 by holding that the "peak indebtedness rule" is not available to liquidators when assessing the value of running accounts in unfair preference claims. 

In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of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

A recent decision of the Swiss Federal Supreme Court clarified the question whether a Swiss ancillary bankruptcy estate has standing to contest a schedule of claims of a bankrupt Swiss third-party debtor if the foreign bankruptcy estate filed the respective claims directly and regardless of the recognition of the foreign bankruptcy decree. In essence, the Swiss Federal Supreme Court denied the standing of the ancillary bankruptcy estate as it may in such cases not be considered a creditor of the respective claims.

The COVID-19 crisis has emphasised the importance of having performant insolvency proceedings. As of now, new measures are in force which aim to optimise the judicial reorganisation procedure. We elaborate on the three most relevant changes.

Belgian insolvency law organises two main types of insolvency proceedings: bankruptcy (faillissement/faillite) which is a winding-up proceeding and judicial reorganisation (gerechtelijke reorganisatie/réorganisation judiciaire) which is a safeguard proceeding.