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 Nortel Networks Corporation saga was unique for the parties, the lawyers and the judges. Judge Gross of the U.S. Bankruptcy Court in Delaware and I presided over the case in a joint trial that had never occurred before³.

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.

The Supreme Court of Canada (“SCC”) in Canada v. Canada North Group Inc., 2021 SCC 30 [Canada North] recently held that courts in proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”) have the authority to rank super-priority charges ahead of the Crown’s deemed trust claim for unremitted source deductions.

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In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of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

Good faith, honesty, and transparency are the watchwords of Canada’s insolvency regimes. Where a debtor makes a proposal under the Bankruptcy and Insolvency Act (the “BIA”), but the Court finds that instead of acting in good faith it engaged in self-interested behavior designed to benefit other members of a corporate group, the Court will uphold the BIA’s principles and refuse to sanction the proposal.

Madoff

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.