Chapter 11 plans are a form of stakeholder democracy. Elaborate rules govern voting and its consequences, and, in Section 1125(b), how acceptances—and rejections—may be solicited. Well, sort of.

On 29 September 2021 the High Court dismissed a challenge to Caffè Nero’s 2020 CVA brought by one of its landlords, Ronald Young. Young asserted that the CVA was unfairly prejudicial and subject to material irregularities (thereby engaging both grounds of challenge under s.6 of the Insolvency Act 1986), and that the CVA nominees and company directors had breached their duties by failing to adjourn or postpone voting on the CVA upon receipt of a late-in-the-day offer for the Caffè Nero group.

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10 Regulations 2021) (the “Regulations”) will modify CIGA by extending certain restrictions on the use of winding up petitions, albeit on a more limited basis, in line with the tapering of government support measures introduced to combat the economic impact of COVID-19.

Chapter 11 plans of reorganization provide creditors with recoveries (cash or new securities) in exchange for a release and discharge of all claims against the debtor. Many Chapter 11 plans go a step further to release claims against related entities and persons who are not debtors in the case. Members of Congress have recently proposed legislation that could prohibit such nonconsensual third-party releases.

The English High Court has sanctioned the scheme of arrangement proposed by Provident Financial, by which the net liabilities of two Provident group companies to their redress creditors will be subject to a 90-95% haircut. This case raises two interesting questions.

Why was the scheme sanctioned when the recent Amigo Loans scheme was not?

Some further important guidance by Zacaroli J in the recent judgment on Hurricane Energy. In that case, the company (with the support of the company's ad hoc committee of bond holders who were going to take 95% of the equity under the plan in return for certain adjustments to the bonds) sought to cram down the class of dissenting shareholders through a restructuring plan ("plan").

After a sluggish year in 2020 for mergers and acquisitions among hospitals and health systems, 2021 has shown renewed vigor and is poised for considerable transactional activity.

The ability to assume or reject executory contracts is one of the primary tools used by debtors in a Chapter 11 reorganization. Where a debtor has a contract with a third party that is “executory”—meaning that ongoing performance obligations remain for both the debtor and the contract counterparty on the date of the bankruptcy filing—the debtor can choose to either assume or reject the contract under 11 USC § 365.

Subordination agreements are generally enforced in accordance with applicable non-bankruptcy law in bankruptcy cases. The decision in In re Fencepost Productions, Inc., No. 19-41542, 2021 WL 1259691 (Bankr. D. Kan. Mar. 31, 2021) recognizes limits to this rule. While the subject subordination agreements were generally enforceable, the assignment of Chapter 11 voting rights in such agreements was not.

On 20 May 2021, the UK government published a consultation paper in which it set out its proposals to revise the current regime for insolvent insurers (excluding Lloyd’s underwriters). The proposals seek to clarify and enhance aspects of the existing “write-down” power of the court under Section 377 of the Financial Services and Markets Act 2000.