On November 1 2007 the State Commission for Insolvency Law presented the Preliminary Bill for an Insolvency Act to the minister of justice. The most important changes to the existing Bankruptcy Act are outlined in this update.

The United States Bankruptcy Court for the District of Delaware on May 30, 2008, issued a memorandum opinion in which it refused to dismiss claims of breach of fiduciary duty against directors and officers of a company who approved the sale of the company’s assets on the eve of its filing for bankruptcy protection. In issuing its opinion inIn re Bridgeport Holdings Inc., the court provided some guidelines for directors and officers, particularly during challenging economic times.

This update discusses an issue that may arise in relation to the recognition of foreign bankruptcies where the law of the receiving state does not provide for admittance proceedings. This issue recently arose in the Yukos proceedings.

Facts

The Third Circuit Court of Appeals recently upheld the dismissal of a suit by the shareholders and creditors of Vlasic Foods International, Inc., a former Campbell Soup subsidiary that had been “spun out” of the parent. The case, VFB, LLC v. Campbell Soup Co. (March 30, 2007), upholds the broad discretion of trial courts to determine valuation issues in the context of corporate transactions and, more specifi cally, gives great weight to market capitalization as a measure of value.