Despite the ongoing global pandemic, opportunities for stressed and distressed investments have not been as prolific as many expected. The window for entry into credits opened and closed more quickly than imagined. Nevertheless there have been several high-profile restructurings using the English scheme of arrangement. Of course, some of these were already in motion prior to the onset of the pandemic. A handful of these have sought to test the recently enacted insolvency regime, whilst others have tested more established legislative principles.
THE CHALLENGE:
After years of selling services at a loss to grow its customer base, Agera Energy—a retail electricity and natural gas provider for commercial, industrial and residential customers in 16 states—realized its business was no longer viable. The company decided to file for chapter 11 bankruptcy protection after evaluating strategic alternatives.
The enacted Corporate Insolvency and Governance Act (the Act) introduces three permanent reforms to the existing insolvency legislation and certain temporary measures designed to address the immediate impact of COVID-19 on UK businesses. Among other things, the Act looks to maximise the potential for struggling companies to be maintained as a going concern. As market participants and the courts get to grips with the new legislation, it is clear that there will be some impact on the special situations landscape and the business of stressed and distressed investment.
Two recent bankruptcy court cases remind counsel of the great importance of knowing the proclivities of the presiding panel of judges who will hear your client’s case. Experienced practitioners know the law and the best advocates also know the assigned judges. Both cases discussed below illustrate the importance, at least in bankruptcy practice, of arguing the law in a fashion that addresses the court’s sense of what is fair and proper under the case’s unique circumstances.
Voluntary Retirement Plan Contributions Are Required for Maintenance or Support?
Permanent Reforms
Moratorium: a new stand-alone moratorium to provide businesses with an initial 20-business-day stay from creditor action.
The Federal Reserve recently announced that it’s Municipal Liquidity Facility (MLF) is taking applications from eligible issuers and will soon purchase notes at the following interest rates.
This is part of our Commercial Real Estate Finance COVID-19 Impact Series, which is aimed at providing informed and real-time guidance tailored to various sectors of commercial real estate owners. In the context of recent bankruptcy filings by national shopping center tenants, this article examines the interplay between a tenant bankruptcy and a landlord’s obligations under its loan documents.
The next article in our Commercial Real Estate Finance COVID-19 Impact Series looks at landlord/tenant issues arising from the COVID-19 pandemic through the lens of our Bankruptcy and Restructuring Practice Group, providing informed and real-time guidance tailored to various sectors of commercial real estate owners. In the context of recent bankruptcy filings by national shopping center tenants, this article highlights key areas for consideration when a tenant files bankruptcy and what steps landlords can take to be proactive in these circumstances.
The US Court of Appeals for the Sixth Circuit affirmed that a state court’s finding of “willful and malicious injury” in connection with the misappropriation of trade secrets entitled the plaintiff, in the defendant’s subsequent bankruptcy proceeding, to summary judgment of nondischargeability on collateral estoppel grounds. In re Hill, Case No. 19-5861 (6th Cir. May 4, 2020) (Donald, J.).
Americans are in an unemployment crisis due to COVID-19 business closings, and many are accruing debt in order to maintain their basic lives – unpaid utilities, buy food on credit, etc. For many, the vehicle to obtain that debt is credit cards, home-equity loans, or simply failing to pay creditors who invoice customers after providing goods and services, such as doctors.[1]