Fifth Circuit finds that make-whole premiums should be considered unmatured interest subject to disallowance under Section 502(b)(2) of the Bankruptcy Code to the extent designed to compensate for future interest payments.

Overview

On 7 December 2018, Serbian Parliament passed yet another Act on Amendments of Bankruptcy Law that will be applicable as of 1 January 2019.

These changes make the third change of the Bankruptcy Law in less then a year.

German legislator finally introduces tax exemption for income resulting from debt waivers in restructuring scenarios with retroactive effect.

Section 423 of the Insolvency Act 1986 continues to be a useful tool available to creditors for challenging transactions at an undervalue.

Section 423 gives the English court the power to set aside a transaction (most notably an asset disposal or a dividend) entered into by a debtor if the value of the consideration received by that debtor is significantly less than the value of the consideration the debtor provides to the other party to the transaction. Creditors ought to bear in mind this power when scrutinising a debtor’s previous actions.

The Ministry of Commerce issued a Communiqué on 15 September 2018 ("Communiqué") setting out the principles and procedures pertaining to the application of Article 376 of the Turkish Commercial Code ("TCC"). In brief, Article 376 regulates the measures to be adopted by joint stock companies and limited liability companies (for the purposes of this article, each a "company") in cases of loss of capital or insolvency.

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.

Introduction

Law No 7101 on Amendments to the Enforcement and Bankruptcy Law and Other Laws (“Law No 7101”) has been published in the Official Gazette dated 15 March 2018. Law No 7101 i) abolishes the postponement of bankruptcy procedures, ii) introduces a new composition procedure for insolvent companies and iii) improves secured creditors’ rights in bankruptcy.

Lifting of Postponement of Bankruptcy

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.

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

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