Background
In February 2012, following the highly political closing of the Florange site, a steel production plant, President François Hollande vowed that going forward any company wanting to close down its operations in France would have an obligation to first look for a purchaser.
The bankruptcy of a tenant is disruptive and may be confusing to a landlord; however, arming yourself with knowledge of some warning signs of financial distress and an understanding of your basic rights will, along with your trusted legal advisor, help you be prepared in the unlucky event that your tenant goes bankrupt.
3 Signs of an Impending Bankruptcy
1. Rent Delinquency
Given the unfortunate reputation of French courts for awarding substantial damages to employees for unfair terminations, US corporations with operations in France are anxious to limit their financial and legal exposure in case of litigation initiated by their French workforce. How to achieve this efficiently is a far from rhetorical question as French employees frequently pull in the US parent company as a named defendant. The recent decision of the French Supreme Court [Cass. Soc.
One of the more effective risk-mitigation legal tools used by senior real estate lenders is the single purpose entity borrower. Among other things, having a single purpose, bankruptcy remote borrower makes avoiding the risks of bankruptcy easier. Even in bankruptcy, if the borrower is truly single purpose, and it keeps the universe of creditors small, the senior secured lender will have an easier time defeating any plan of reorganization proposed by the borrower because it will control all of the legitimate classes of creditors by virtue of th
On March 13, 2014 the Supreme Court of Canada dismissed applications for leave to appeal by a group of alleged former institutional shareholders of Sino-Forest Corporation. These institutions unsuccessfully sought leave to appeal from orders approving Sino-Forest’s Companies’ Creditors Arrangement Act (CCAA) plan and approving a settlement reached between Ernst & Young and the plaintiff group that was awarded carriage of Sino-Forest class actions in Ontario.
Financiers and lenders to Canadian companies have become increasingly concerned about potential priorities of pension claims in Canada over the past year following the 1 February 2013 decision of the Supreme Court of Canada (SCC) in the Indalex case (Sun Indalex Finance, LLC v. United Steelworkers, 2013 SCC 6). Much of this concern may have been caused by conjecture as to how the SCC's decision would be applied in future insolvency proceedings, rather than the relatively narrow issue that was actually before the SCC in Indalex.
In recent years, bankruptcy courts have come closer to reaching a consensus regarding their ability to recharacterize debt into equity. Yet, beneath this consensus lies a deepening divide that lenders should be aware of. Recharacterization challenges “the assertion of a debt against the bankruptcy estate on the ground that the ‘loaned’ capital was actually an equity investment.” In re Insilco Techs., Inc., 480 F.3d 212, 217 (3d Cir. 2007) (internal citations omitted).
Bankruptcy is intended to provide a fresh start and discharge outstanding debt. But some debt is not dischargeable in bankruptcy. A Virginia bankruptcy court held last week that a judgment against the debtor for intentional trade secret misappropriation is not dischargeable.
On August 21, 2013, in Wellness International Network v. Sharif, No. 12-1349 (7th Cir. August 21, 2013), the Seventh Circuit issued its latest opinion on the thorny issues emanating from the Supreme Court’s “narrow” decision in Stern v. Marshall, 131 S. Ct.