The Bankruptcy Code does not explicitly authorize the equitable remedy of "substantive consolidation"—i.e., treating the assets and liabilities of two or more related entities as if they belonged to a single, consolidated bankruptcy estate. However, it is well recognized that a bankruptcy court has the authority to order such relief under appropriate circumstances in the exercise of its broad equitable powers when each of the original entities are already debtors subject to the court's jurisdiction.

Recent headlines have starkly illuminated the headwinds facing health care providers struggling to recover from a host of financial pressures. Many providers have resorted to filing for bankruptcy protection as a way, among other things, to right-size their balance sheets or effect a sale of their assets or businesses.

Introduction

Les cas d’insolvabilité commerciale devraient continuer d’augmenter à court terme en raison de la hausse des taux d’intérêt, des perturbations dans les chaînes d’approvisionnement et de l’augmentation conséquente du coût des marchandises. Une flambée des cas d’insolvabilité commerciale pourrait également augmenter la probabilité que les entreprises soient touchées par une procédure d’insolvabilité officielle en tant que créancier, fournisseur ou client, ou autrement en tant que partie prenante.

In Short

The Background: On November 15, 2023, the Temporary Fast-Track Liquidation Transparency Act (Tijdelijke Wet Transparantie Turboliquidatie) (the "Act") came into force in the Netherlands, temporarily changing certain statutory provisions in the Dutch Civil Code (Burgerlijk Wetboek), the Dutch Bankruptcy Act (Faillissementswet), and the Dutch Economic Offenses Act (Wet op de economische delicten).

Introduction

A "double-dip" structure is considered a way to allow some creditors to have multiple claims against key obligors arising out of the same underlying transactions. These additional claims could improve their position relative to other creditors in a bankruptcy or liquidation.

Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.

Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.

In Short:

The Situation: After the nationalization of the Dutch SNS banking and insurance group, the Dutch Minister of Finance offered zero compensation to expropriated bondholders.

The Result: Ten years after the nationalization, the Dutch Supreme Court confirmed compensation awards totaling approximately €1 billion including accrued interest.

Looking Ahead: The SNS case provides some interesting lessons on where those seeking compensation in the context of bank bailouts and resolutions may head.