Hungary has passed an Act that implements EU Directive 2019/1023 on preventive restructuring frameworks, the discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (amending EU Directive 2017/1132). This new Act was published in Hungary's Official Gazette on 3 June 2021 and will come into force on 1 July 2022.

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.

Most corporate bankruptcy filings result in either a plan of reorganization under Chapter 11 of the Bankruptcy Code (the Code) or a liquidation under Chapter 7 of the Code. Sometimes, however, neither option is viable and the debtor may need to seek a “structured dismissal” in accordance with Section 349 of the Code. Structured dismissals provide administratively insolvent debtors with a framework to distribute the estate’s remaining assets (without the additional cost of a Chapter 7 liquidation), wind down the estate, and obtain final dismissal of the case.

The Court (Mr Justice Miles) has refused to sanction a scheme of arrangement (the “Scheme”) between ALL Scheme Limited (the “Company”) and its creditors. The Company is an entity within the Amigo group of companies (the “Group”).

Mr Justice Zacaroli has handed down his judgment in Carroway Guildford (Nominee A) Limited and 18 others and (1) Regis UK Limited, (2) Edward Williams (as Joint Supervisor of Regis UK Ltd) and (3) Christine Mary Laverty (as Joint Supervisor of Regis UK Ltd) [2021] EWHC 1294 (Ch) following his decision in the New Look challenge last week.

Summary

Hurstwood Properties (A) Ltd and others (Respondents) v Rossendale Borough Council and another (Appellants)

The Supreme Court has delivered its keenly anticipated judgment in a case concerning the validity of two business rates mitigation schemes. The schemes under scrutiny involved property owners letting unoccupied properties to special purpose vehicles (“SPVs”) which benefitted from a business rates exemption and therefore allowed both the property owners and the SPVs to avoid liability for business rates.

The much anticipated judgement of Mr Justice Snowden in relation to a restructuring plan proposal (the “Plans”) made by Virgin Active Holdings Limited, Virgin Active Limited and Virgin Active Health Clubs Limited (the “Plan Companies”) was handed down on 12 May 2021.

Summary

The much anticipated judgement of Mr Justice Snowden in relation to a restructuring plan proposal (the “Plans”) made by Virgin Active Holdings Limited, Virgin Active Limited and Virgin Active Health Clubs Limited (the “Plan Companies”) was handed down on 12 May 2021.