The Court of Appeal in Hunt v Ubhi has confirmed that insolvency practitioners seeking freezing orders are subject to the default requirement of providing an unlimited cross-undertaking in damages.

Directors and officers should take note of a recent decision from the US Bankruptcy Court for the Southern District of New York concerning access to D&O insurance policy proceeds. In In re SVB Financial Group, Case No. 23-10367 (Bankr. S.D.N.Y.

In a highly anticipated decision issued on May 30, 2023, the Second Circuit Court of Appeals rendered its opinion in Purdue Pharma LP v. City of Grand Prairie (In re Purdue Pharma LP)¹ approving a Chapter 11 plan’s inclusion of a nonconsensual release of creditors’ direct claims against non-debtor third parties.

This client alert describes the history of the case, identifies some of the key takeaways from the decision and outlines where other jurisdictions in the country stand on nonconsensual third-party releases.

In an anticipated decision, on May 30, 2023, the Second Circuit Court of Appeals issued its decision approving a Chapter 11 plan’s inclusion of a nonconsensual release of direct claims against non-debtor third parties. Purdue Pharma LP v. City of Grand Prairie (In re Purdue Pharma LP), No. 22-110 (2d Cir. May 30, 2023).

On May 2, 2023, the US District Court for the Southern District of Indiana reversed a bankruptcy court’s ruling that read limitations into the application of Bankruptcy Code Section 546(e)’s safe harbor to a stock purchase transaction. Specifically, the District Court relied on the plain language of Section 546 in determining that a chapter 7 trustee could not avoid the transfer of $24.9 million by the debtor to repay a bridge loan in connection with a financed acquisition of the debtor’s stock two years prior to its bankruptcy filing.

On April 17, 2023, the Fifth Circuit issued an opinion holding that a senior lender who uses economic leverage and exercises its statutory and contractual rights upon a borrower’s default, including the right to credit bid as part of a bankruptcy sale process—despite adverse impact on a junior lender—remains a “good faith” purchaser entitled to the protections under Section 363(m) of the Bankruptcy Code.

In the second largest US bank failure since the 2008 global financial crisis, the California Department of Financial Protection and Innovation took over Silicon Valley Bank (“SVB”) on March 10 and appointed the Federal Deposit Insurance Corporation (“FDIC”) as SVB’s receiver. Just two days later, the New York State Department of Financial Services took over another bank, Signature Bank, and appointed the FDIC as receiver. And, yesterday, the share price of various European banks plunged following record one-day selloffs.

This article provides information regarding what will now happen to the operations and business of the UK arm of Silicon Valley Bank (SVB UK) after the sale (the Sale) of SVB UK to HSBC’s ring-fenced UK subsidiary, HSBC UK Bank plc (HSBC).

The Bank of England (the BoE) will apply to put the UK arm of Silicon Valley Bank (SVB UK) into Bank Insolvency, which is a modified version of liquidation under Part 2 of the Banking Act 2009, on Sunday 12 March 2023 unless a buyer can be found for SVB UK’s business and assets.

The situation remains fluid and this represents our advice based on public announcements by the BoE and SVB UK that we are aware of as at 12pm on 12 March 2023.

With an increased number of businesses experiencing financial difficulties given rising inflation, the weaker pound and interest rate increases, debt restructurings are becoming, and are expected to continue to become, more common.

Such restructurings are often achieved by a third-party lender releasing or materially amending all or part of its debt, which would result in taxable income arising to a UK corporate borrower unless a relevant exemption applies.