The Fifth Circuit recently weighed in on the hotly contested issue of whether the Federal Energy and Regulatory Commission (FERC) or the bankruptcy court has controlling jurisdiction when it comes to the question of a bankruptcy debtor’s ability to reject contracts regulated by FERC. FERC-regulated contracts include electricity power purchase contracts, as well as transportation services agreements involving oil and gas.
Background
German insolvency law prohibits managing directors from making payments on behalf of the company after it has become illiquid or over-indebted. This does not apply to payments made when acting with the due care and diligence of a prudent business manager. Such payments are privileged as they do not reduce the insolvency estate and do not disadvantage creditors if they allow the business to continue and enable corporate recovery.
Decision
After two years of lockdowns, Poland, like many other countries, is feeling the significant economic impact of Covid-19.
With the conflict in Ukraine, there is a risk that this economic turbulence will be magnified. Signs of uncertain times ahead include rising inflation and climbing interest rates. These are problems which will take time and effort to resolve. The government and parliament are proposing changes to legislation aimed at helping companies and entrepreneurs to conduct business “as usual” and to take the edge off the harsh realities.
The High Court has sanctioned the restructuring plan of ED&F Holdings Ltd, providing further clarity on the exercise of its discretion to sanction a plan using cross-class cram down.
Background
At the convening hearing, the court ordered that five creditor and two member class meetings be held. All but one of the creditor classes approved the plan by large majorities.
Sanction hearing
In the bankruptcy world, not all claims are created equal. Rather, certain special categories of claims have priority status and are not only paid ahead of other claims, but are also often paid in full. One such category of claims is found in Bankruptcy Code § 503(b)(9), which grants priority claim status for goods which were sold in the ordinary course of business and received by a debtor within the 20-day window leading up to the bankruptcy filing. The code section is very clear, however.
Update unseres Leitfadens zum Umgang mit Materialkostenerhöhungen und Lieferverzögerungen
Die aktuelle Entwicklung bei Baukosten und Materiallieferungen
The English High Court has sanctioned Smile Telecom Holding Limited's (Smile) restructuring plan, despite there being no parallel restructuring proceedings in Mauritius, the place of Smile's incorporation.
Background
An increasing body of English case law has recognised cryptocurrencies as a form of property giving rise to the possibility of insolvency clawback claims involving cryptoassets.
Recent developments
On 18 January 2022, Hong Kong-listed cruise operator Genting Hong Kong Limited ('Genting HK') filed for provisional liquidation with the Supreme Court of Bermuda after it failed to secure access to liquidity. Genting HK has since gone into liquidation.
Background
The temporary restrictions on the winding up of companies were lifted on 31 March 2022. This means the legal regime governing insolvency has returned to its pre-pandemic approach.
The pre-31 March position