Intercreditor agreements between multiple lenders are part and parcel of lending to a company with several tranches of debt. Under section 510 of the United States Bankruptcy Code (the “Code”), “[a] subordination agreement is enforceable in a case under this title to the same extent that such agreement is enforceable under applicable nonbankruptcy law.” 11 U.S.C. § 510(a) (West 2017).

The sole shareholder of several closely held corporate entities engages in a fraudulent transfer by extinguishing one entity’s right to payment from a third party in exchange for the release of liabilities owed by other entities to that same third party. In Motorworld, Inc. v. William Benkendorf, et al., __ N.J. __ (Mar. 30, 2017), the New Jersey Supreme Court voided such a transfer against a Chapter 7 debtor corporation whose sole asset was a $600,000 loan receivable purportedly cancelled by the release.

In this case, the firm was instructed by the English liquidators of Arck LLP (in liquidation) to assist in the recovery of assets misappropriated from a large number of British investors and channelled through Jersey corporate and trust structures as part of a fraudulent collective investment scheme.

The Supreme Court issued its much-anticipated ruling in Czyzewski v. Jevic Holding Corp., 580 U.S. ___ (2017)1 on March 21, reversing the Third Circuit Court of Appeals’ affirmance of an order approving the distribution of the proceeds of settlement of bankruptcy estate causes of action to general unsecured creditors via structured dismissal, with no distribution to holders of priority wage claims.

The Court framed the question presented, and its ruling, very narrowly—twice. First:

In a very recent decision, the U.S. District Court for the Southern District of New York determined that a negative inference to an exception to a negative covenant prevented a company from undertaking a proposed restructuring transaction. We find the case unique not because of the result necessarily, but rather because the court used the negative inference to override another express provision in the Credit Agreement.

The British Virgin Islands ("BVI") is a long-standing jurisdiction of choice for incorporating joint venture and private equity vehicles. In more recent years it has also become an established option for investment funds. This is due to its business-friendly and flexible main corporate statute, the BVI Business Companies Act (the "Act"), as well as the BVI’s modern regulatory and judicial regime.

Plans and Schemes of Arrangement in the British Virgin Islands

This briefing note provides an outline of the different processes of voluntary and compulsory winding up under the Companies (Guernsey) Law, 2008 (as amended) (the “Law”). It does not cover striking off companies or the specific provisions on winding up of protected cell companies and incorporated cell companies. Further information on the effect of the Law on the winding up of these company structures can be found in our separate briefing notes on those subjects.

The mechanics of a voluntary winding up

1 / FEBRUARY 2017 | Cell Companies in Guernsey BRITISH VIRGIN ISLANDS CAYMAN ISLANDS GUERNSEY JERSEY CAPE TOWN HONG KONG LONDON SINGAPORE WWW.CAREYOLSEN.COM FEBRUARY 2017 INVESTMENT FUNDS & INSURANCE CELL COMPANIES IN GUERNSEY 2 / FEBRUARY 2017 | Cell Companies in Guernsey INTRODUCTION This note summarises Guernsey law relating to protected and incorporated cell companies. For more detailed information on protected cell companies and incorporated cell companies please see the separate briefing notes on each.

This briefing note describes the key features of the incorporated cell company (“ICC”) and summarises the formation, structure and liquidation procedures particular to this type of company.

Key features

The BVI Commercial Court (the Honourable Justice Davis-White QC [Ag]) has recently ordered the appointment of liquidators over Pacific Andes Enterprises (BVI) Limited, Parkmond Group Limited, and PARD Trade Limited (the “Companies”), three BVI incorporated companies forming a key part of the China Fishery Group.

The applications were unsuccessfully contested on the principal ground that the appointment of liquidators would irretrievably damage the prospects of a wider, global restructuring of the Pacific Andes Group.