Your business now faces an adversary complaint filed by the bankruptcy trustee. The complaint has several counts alleging that your business received fraudulent transfers of assets from a debtor in bankruptcy. The complaint alleges two types of fraudulent transfers. The first is actual fraud, which involves a debtor’s intent to delay, hinder, or defraud its creditors. The second is referred to as constructive fraud, which involves a debtor’s transfer of assets made in exchange for inadequate consideration.

Type of Transferee

Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in France, Italy, Singapore, and the United Kingdom and as affiliated partnerships conducting the practice in Hong Kong and Japan. Latham & Watkins operates in South Korea as a Foreign Legal Consultant Office. Latham & Watkins works in cooperation with the Law Office of Salman M. Al-Sudairi in the Kingdom of Saudi Arabia.

Possible application of Section 101(22)(A) to safe harbor’s covered entity requirement raises important questions for future transferee defendants.

Key Points:

• Merit Management raises the possibility that customers of “financial institutions” may qualify for protection under Section 546(e) safe harbor even if they would not otherwise meet Section 546(e)’s covered entity requirement.

• Treating customers of “financial institutions” as covered entities could broaden the scope of safe harbor.

The Eleventh Circuit recently reaffirmed the “person aggrieved” doctrine in In re Petricca, 17-10325, 2018 WL 1020046, at *1 (11th Cir. Feb. 22, 2018). The person aggrieved doctrine provides that a person may appeal from a bankruptcy court’s order only if he is a person aggrieved by the order. The doctrine limits the right to appeal a bankruptcy court order to those parties having a direct and substantial interest in the question being appealed.

UK-based offshore and subsea oil & gas services company solidifies its position and completes ownership transfer to noteholders in major company milestone.

Ever wonder about bankruptcy appeals; about how long a bankruptcy appeal to the Eleventh Circuit Court of Appeals will take? The answer lies in the Court’s statistical data.

When a person takes an action against an individual debtor in bankruptcy in violation of the automatic stay imposed under Section 362(a) the debtor is entitled to recover damages under Section 362(k)(1) to include costs and attorneys’ fees. An issue regarding the extent of damages to be recovered has centered on whether the fees that shall be awarded are limited to those incurred in ending the stay violation, or if they also include the fees incurred in pursuing the damage award, including defending the award on appeal.

Venezuela’s initiative is unlikely to set the stage for a restructuring of international obligations in the face of US sanctions.

Key Points:

• US sanctions will prohibit US persons from engaging in a restructuring of Venezuela and PdVSA debts that includes the issuance of “new” long term debt.

• Creditors should expect that enforcement action will follow a default. The outcomes of that enforcement action will affect all stakeholders, whether or not they participate.

Restructuring Announcement

Ruling overturns New York decision rejecting market-based approach.

Key Points:

• Court of Appeals for the Second Circuit requires courts to consider efficient market interest rate, if available, for purposes of chapter 11 “cramdown.”

• Second Circuit decision overturns lower court ruling that used “formula approach” to determine appropriate chapter 11 cramdown interest rate.

On October 19, 2017, the Eleventh Circuit Court of Appeals stated “a bankruptcy court can enjoin any civil action if the outcome could alter the debtor’s rights, liabilities, options, or freedom of action or in any way impacts upon the handling and administration of the bankrupt estate.” In re: Fundamental Long Term Care, No. 16-16462, 2017 WL 46826791 at *8 (11th Cir. Oct. 19, 2017) (emphasis added).