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New German Restructuring Regime (Starug) an Introductory Guide

The new German stabilizing and out of court restructuring regime came into effect on 1 January 2021. The "Stabilization and Restructuring Framework of Companies Act", known as StaRUG1, heralds a new phase in the German restructuring landscape, introducing a framework of tools including a new restructuring plan, which will enable debtors to restructure and cram down minority creditors outside of German insolvency proceedings for the first time.

European Union, Germany, USA, Insolvency & Restructuring, Weil Gotshal & Manges LLP, Coronavirus
Officers of Selling Companies May Escape Fiduciary Duty Liability But May Be Required to Return Change of Control Payments if Company is Insolvent Post-Closing (Nine West Part 2)

While there has been much fuss over the recent ruling by the United States District Court for the Southern District of New York in In re Nine West LBO Securities Litigation1 due to its potential ramifications for director liability, as we explored in Part I of our series on this case here, court watchers have paid less attention to the court’s treatment of officer liability and the interes

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Private equity, Due diligence
Supreme Court Holds That a Non-Debtor Retaining a Debtor’s Property Does Not Exercise Control Over the Property in Violation of the Automatic Stay

In January 2020, we analyzed a split among the Circuit Courts regarding whether a non-debtor holding a debtor’s property on the petition date has an affirmative obligation under section 362(a)(3) of the Bankruptcy Code to return that property to the debtor immediately following the filing of the bankruptcy petition.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
In re Buffets: A Fees-t for the United States Trustee

The holidays came early for the United States Trustee (the “U.S. Trustee”) on November, 3, 2020, when a three-judge panel of the United States Circuit Court for the Fifth Circuit, on direct appeal, reversed the bankruptcy court and upheld the constitutionality of a 2017 increase to quarterly fees payable to the U.S. Trustee in Hobbs v. Buffets LLC (In re Buffets LLC), No. 19-50765, 2020 U.S. App. LEXIS 34866 (5th Cir. Nov. 3, 2020). Although the Fifth Circuit’s opinion addresses a variety of constitutional challenges to the recent increase to U.S.

USA, Insolvency & Restructuring, Litigation, Private Client & Offshore Services, Weil Gotshal & Manges LLP, Trustee, Fifth Circuit
Attention Buyers of Assets in Bankruptcy: How To Be A Good Faith Purchaser and Ensure Any Post-Closing Challenges Will Be Dismissed as Statutorily Moot Under Section 363(m) of the Bankruptcy Code

Introduction

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Tenth Circuit BAP Decision Authorizes Claim for Postpetition Interest Under 506(b): Read the Fine Print!

In a recent decision, Twiford Enters. v. Rolling Hills Bank & Trust (In re Twiford Enters.), 2020 Bankr. LEXIS 2964, 2020 WL 6075691 (10th Cir. BAP 2020), the Tenth Circuit Bankruptcy Appellate Panel affirmed the lower court’s decision awarding postpetition interest pursuant to section 506(b). The disputed issue was whether a reference in the variable rate promissory notes to an internal rate index maintained by the bank was sufficiently clear and specific to support a claim for postpetition interest. The court held that it was.

USA, Banking, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Warning to Directors of Selling Companies: Breach of Fiduciary Duty Liability May Exist for Failure to Investigate and Ensure Solvency of Company Post-Closing and Propriety and Effect of All Related Transactions (But You Can Protect Yourself)

A recent ruling from the United States District Court for the Southern District of New York sent shock waves through the legal and financial community, with some shouting that this “could be a gamestopper for the private equity business.”1 Although the ruling in In re Nine West LBO Securities Litigation2 breaks new ground and arguably narrows the protections available to directors under the normally-broad business judgment rule, there are clear lessons others can take from this saga to prevent a similar fate.

USA, Company & Commercial, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Private equity, Due diligence
Yeah, We Can Take It - Texas Bankruptcy Court Defines the Scope of Its Post-Confirmation Jurisdiction

Executive Summary

A recent decision from the United States Bankruptcy Court for the Northern District of Texas, In re Care Ctrs., LLC, No. 18-33967, 2020 Bankr. LEXIS 3205 (Bankr. N.D. Tex. Nov. 12, 2020), examined (1) the scope of bankruptcy court subject-matter jurisdiction for post-confirmation actions filed in state court and removed to bankruptcy court; and (2) when the court must or should abstain and remand a proceeding back to the court where the action was originally brought.

USA, Texas, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Eastern District of Virginia Bankruptcy Court Finds Landlord’s Lender Has No Right to Enforce Landlord’s Lease with Bankrupt Retailer

OVERVIEW

USA, Insolvency & Restructuring, Litigation, Real Estate, Weil Gotshal & Manges LLP, Coronavirus
European Restructuring Watch Alert: Extension of Restrictions on Statutory Demands, Winding up and Forfeiture to 31 March 2021

On 9 December 2020, the UK government gave businesses muchneeded breathing space with an extension of insolvency measures. 

United Kingdom, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Coronavirus