Cross-border debtors gain another tool to use against dissident creditors seeking to disrupt foreign restructuring proceedings.

Introduction

Ultra court clarifies the requirements for classifying a creditor as “unimpaired” under a plan of reorganization.

Key Points:

• Texas bankruptcy court splits from Third Circuit in finding that a creditor must receive everything it is entitled to under non-bankruptcy law in order for the creditor to be “unimpaired.”

• The decision does not require that unsecured creditors receive post-petition interest but provides that they will be “impaired” if they do not

In a ground-breaking decision for the Cayman Islands as a restructuring centre, the Cayman Islands court has handed down judgment sanctioning four highly complex inter-linked schemes of arrangement.

The schemes result in the compromise of US$3.69 billion of New York law governed debt for the Cayman Islands registered parent of the Ocean Rig group and three of its Marshall Islands incorporated subsidiaries.

In a decision that will reassure investors in Cayman Islands investment funds and other vehicles, the Grand Court has shown its willingness to facilitate the investigation of legitimate concerns raised during a voluntary liquidation.1

The decision is the first written ruling on the Court's power to defer the dissolution of a Cayman Islands company in voluntary liquidation under section 151(3) of the Companies Law and also considers the Court's power to bring a voluntary liquidation under the Court's supervision in the context of an investigation into possible wrongdoing.

The timing of the commencement of the voluntary liquidation of a Cayman Islands company was often driven primarily by the desire to avoid incurring the following year’s annual government fees. To avoid those fees, the liquidation had to commence by December, with the final meeting being held before the end of January. This timetable allowed for an effective dissolution date into the next calendar year, while still avoiding the government fees for that year.

The Irish High Court has recently ruled on the test for determining whether the transfer of a debt is a "true sale" or is by way of a charge. It has, helpfully, adopted the well-established test taken in a long line of English cases which emphasises that the legal form of the contract adopted by the parties will determine its nature, provided the contract is not a "sham".

From 26 June 2017 an enhanced EU regime governing the commencement, recognition and enforcement of insolvency and restructuring proceedings throughout the EU will come into effect. The principal aim of the new regime is to encourage a corporate rescue culture within the EU.

The reform of claw-back rights in German insolvency proceedings which provides for more legal certainty for creditors has become effective on 5 April 2017.

Alternative A of the Cape Town Convention [1] now has the force of law in Ireland, following signing of an Order by the Irish Government on 10 May 2017.

The Cape Town Convention was designed to establish a uniform set of rules to provide greater certainty and predictability around the protection, prioritisation and enforcement of rights in aircraft and aircraft engines. The Convention has a commercial objective, namely to facilitate efficient forms of asset-based financing.

Alternative A

From theory to practice, planning to enforcement, the answers to 42 of the most frequently asked questions can help you prepare, cope or respond to a restructuring. This Client Alert answers some of the most frequently asked questions with respect to the treatment of pension-plan liabilities and other post-employment benefits (OPEB) obligations in US bankruptcies. Understanding the treatment of pension and OPEB obligations in bankruptcy continues to be important in today’s business environment and the law relating to the treatment of these obligations continues to evolve.