The Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) issued an opinion on April 9, 2018 recognizing and enforcing a scheme of arrangement that contained non-consensual releases of non-debtor subsidiary guarantors under chapter 15 of the Bankruptcy Code. The Bankruptcy Court held that, in certain situations, such non-debtor releases may be approved and enforced in chapter 15 proceedings based upon principles of comity, even where similar arrangements would be impermissible in a chapter 11 proceeding.
On February 27, 2018, the United States Supreme Court resolved a circuit split regarding the proper application of the safe harbor set forth in section 546(e) of the Bankruptcy Code, a provision that prohibits the avoidance of a transfer if the transfer was made in connection with a securities contract and made by or to (or for the benefit of) certain qualified entities, including a financial institution.
The Court of Appeals for the Ninth Circuit recently held that section 1129(a)(10) of the Bankruptcy Code – a provision which, in effect, prohibits confirmation of a plan unless the plan has been accepted by at least one impaired class of claims – applies on “per plan” rather than a “per debtor” basis, even when the plan at issue covers multiple debtors. In re Transwest Resort Properties, Inc., 2018 WL 615431 (9th Cir. Jan. 25, 2018). The Court is the first circuit court to address the issue.
On September 1, 2017, the Board of Governors of the Federal Reserve System (the Federal Reserve) adopted a rule (the Rule)1 that will require global systemically important U.S. bank holding companies (U.S. GSIBs)2 and most of their subsidiaries to amend a range of derivatives, short-term funding transactions, securities lending transactions and other qualifying financial contracts (QFCs). The required amendments will limit counterparty termination rights related to certain U.S. GSIB resolution and bankruptcy proceedings.
Some six years after the United States Supreme Court decided Stern v. Marshall, courts continue to grapple with the decision’s meaning and how much it curtails the exercise of bankruptcy court jurisdiction.[1] The U.S.
On September 21, 2017, the United States Bankruptcy Court for the Southern District of Texas (the Court) held, over the objection of Ultra Petroleum Corp.
On June 26, 2017, the recast EU regulation on insolvency proceedings1 (the Recast Insolvency Regulation) came into force.
Existing Legislation
The new Insolvency (England and Wales) Rules 2016 (SI 2016/1024) came into force on April 6, 2017 (the 2016 Rules). The 2016 Rules replace the Insolvency Rules 1986 (SI 1986/1925) and their 28 subsequent amendments (the 1986 Rules) and represent a continuation of the Insolvency Service’s recent efforts to modernize and implement policy changes under various pieces of primary legislation.
On March 22, 2017, the United States Supreme Court held that bankruptcy courts cannot approve a “structured dismissal”—a dismissal with special conditions or that does something other than restoring the “prepetition financial status quo”—providing for distributions that deviate from the Bankruptcy Code’s priority scheme absent the consent of affected creditors. Czyzewski v.Jevic Holding Corp., No. 15-649, 580 U.S. ___ (2017), 2017 WL 1066259, at *3 (Mar. 22, 2017).
On January 17, 2017, a divided (2-1) panel of the U.S. Court of Appeals for the Second Circuit (Second Circuit) reversed the decision of the District Court for the Southern District of New York (Southern District) in the Marblegate litigation1 (Marblegate) with respect to the interpretation of Section 316(b) of the Trust Indenture Act of 1939 (TIA).