The Bottom Line

Recently, in In re Dura Automotive Systems, No. 19-12378 (Bankr. D. Del. June 9, 2020), the Bankruptcy Court for the District of Delaware held that granting the Official Committee of Unsecured Creditors (the Committee) derivative standing on behalf of the debtors – a Delaware limited liability company – was precluded by the Delaware Limited Liability Company Act (the Delaware LLC Act).

What Happened?

Introduction and points for consideration by trustees

Summary

The Corporate Insolvency and Governance Bill (the Bill) has completed all of its stages in the House of Commons, without material amendment to the Bill as originally drafted. All three readings in the House of Lords are scheduled to take place in June 2020, and expectations are that the Bill will receive Royal Assent, and will be enacted, very shortly thereafter.

Historically, the interests of landlords whose commercial real estate is occupied by debtors in Chapter 11 proceedings have been generally well protected. Indeed, Section 365(d)(3) of the Bankruptcy Code requires the debtor to timely perform all of its post-petition obligations under its nonresidential leases of real property — most important among those, rent.

The Bottom Line

In Lariat Cos. v. Wigley(In re Wigley), Case No. 18-3489 (8th Cir. March 9, 2020), the Eighth Circuit held that a claim against Debtor B that arose out of a fraudulent transfer made by Debtor A to Debtor B was subject to the statutory cap applicable to lease rejection damages where Debtor A’s underlying liability was premised on its breach of a lease.

What Happened?

The Bottom Line

The Bottom Line

The Bottom Line

In Wheeling & Lake Erie Ry. Co. v. Keach (In re Montreal, Me. & Atl. Ry.), No. 19-1894 (1st Cir. Apr. 9, 2020), the First Circuit held that when determining the value of legal claims as collateral, the party with the burden of proof must establish the likely validity of the claim and the likelihood of recovery — demonstrating possible damages alone does not suffice.

What Happened?

Background

On 6 April 2020, the Insolvency Act 1986 (Prescribed Part) (Amendment) Order 2020 came into force. This order amends the Insolvency Act 1986 (Prescribed Part) Order 2003, and increases the maximum amount of the prescribed part from £600,000 to £800,000.

Prescribed Part

The “prescribed part” is the term given to a portion of funds realised from assets charged by way of floating, but not fixed, charge, where:

1 the floating charge was created on or after 15 September 2003; and