Although the Trade and Cooperation Agreement (TCA) arrived in time to prevent a wholesale “no deal Brexit,” issues of cross-border cooperation and recognition in relation to insolvency and restructuring proceedings were not included in the agreement.
We discussed in the March 2020 edition of the Texas Bar Journal1 the bankruptcy court ruling by Judge Craig A. Gargotta of San Antonio in In Re First River Energy LLC that oil and gas producers in Texas do not hold perfected security interests in oil and gas well proceeds, notwithstanding the Texas Legislature’s efforts to protect producers and royalty owners following the downturn in the 1980s. The Fifth Circuit recently reaffirmed Judge Gargotta’s decision.
The COVID-19 pandemic has caused massive disruption across the globe, resulting in a significant uptick in U.S. restructuring activity. According to AACER, a database of U.S. bankruptcy statistics, an estimated 7,128 business bankruptcies were filed in 2020, representing a 29% increase over the same period last year. Although Chapter 11 filings increased in 2020, many experts believe we have yet to see the full extent of the surge in filings that will occur in the aftermath of the COVID-19 crisis.
A recent bankruptcy case now on appeal is being closely watched for the significant economic repercussions it could have on debtors and creditors alike. On October 26, 2020, in In re Ultra Petroleum Corp., the U.S. Bankruptcy Court for the Southern District of Texas held that the debtor must pay (1) the make-whole premium owed under its debt documents and (2) post-petition interest at the contractual default rate.
This article sets out some reflections on the decision of the Supreme Court in Sevilleja v Marex Financial Limited [2020] UKSC 31 from July 2020 which clarifies the scope of the so-called ‘reflective loss’ rule. The first instance judgment raised some comment-worthy issues regarding the economic torts which were not the subject of any appeal.
The New York Court of Appeals’ recent 4-3 opinion in CNH Diversified Opportunities Master Account, L.P. v. Cleveland Unlimited, Inc., 2020 WL 6163305 (NY Oct. 22, 2020), could provide minority noteholders with additional negotiating leverage in the context of attempted out-of-court restructurings. However, the scope of this decision’s impact, and whether it conflicts with the U.S. Court of Appeals for the Second Circuit’s prior holding in Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Fin. Corp., 846 F.3d 1 (2d Cir.
The Corporate Insolvency and Governance Act 2020 (“CIGA”), which came into force on 26 June 2020, introduced a series of new “debtor friendly” procedures and measures to give companies the breathing space and tools required to maximize their chance of survival. The main insolvency related reforms in CIGA (which incorporates both permanent and temporary changes to the UK’s laws) include:
1. New moratorium to give companies breathing space from their creditors
2. Prohibition on termination of contracts for the supply of goods and services by reason of insolvency
The economic hardships brought about by the COVID-19 pandemic have impacted companies globally, leading many to consider both in-court and out-of-court restructurings. Because this trend will likely continue as the long-term effects of COVID-19 play out, companies with arbitration clauses in their commercial agreements may wish to consider the impact of insolvency on their options for pursuing pending or future arbitrations.
This article discusses some of the main considerations that arise when a party considering arbitration or already engaged in arbitration files for insolvency, or has its counterparty file for insolvency, under German insolvency law.
Since PROMESA was enacted in 2016 to pave the way for a comprehensive restructuring of Puerto Rico’s mounting municipal debt obligations, the U.S. District Court for the District of Puerto Rico (District Court) has become a haven for litigious groups of creditors and other constituencies. Undoubtedly frustrated with the progress and trajectory of the cases of the commonwealth and its subsidiaries, these groups have mounted a number of complex legal attacks to the efficacy and validity of PROMESA. However, the debtors recently secured a significant win in Fin. Oversight & Mgmt. Bd.