On December 4, 2012, the United States Court of Appeals for the Ninth Circuit added to the growing body of case law delineating the extent of bankruptcy courts’ jurisdiction in the wake the Supreme Court’s decision in Stern v. Marshall.

On Nov. 28, 2012, the U.S. Court of Appeals for the Fifth Circuit in In re Vitro S.A.B. de C.V. issued a groundbreaking decision under Chapter 15 of the Bankruptcy Code, which provides the mechanics for U.S. bankruptcy courts to deal with cross-border insolvency proceedings. Although deference to judgments of foreign courts is the norm under Chapter 15, in this instance the Fifth Circuit refused to enforce a court-approved Mexican plan of reorganization on the ground that it contained non-consensual non-debtor releases of noteholders’ claims against the debtor’s non-debtor subsidiaries.

On the 12 December, the European Commission announced the proposal to update Council Regulation 1346/2000 on insolvency proceedings. They also announce a separate initiative whereby it will be highlighting the differences between national laws that have the greatest potential to hamper an efficient insolvency legal framework across the EU.

This Q&A focuses on the need to modernise the EU Insolvency Regulation to facilitate the restructuring of businesses in financial difficulty.

Questions include: why do the current rules need updating, what is the impact of the insolvency rules on the economy, how many businesses are affected and what are the next steps?

On 26 December last, the Personal Insolvency Act 2012 was signed into law by the President.

The various provisions of the Act will come into force through commencement orders which will be made by the Minister for Justice. It is expected that certain sections of the Act relating to its Establishment Day and related provisions, will be commenced shortly.

The remaining provisions will then come into operation on a phased basis under Section 1(2) of the Act, as designated by orders to be made by the Minister.

In a ruling predicted by the Restructuring Review Blog last month, Judge Meredith A. Jury of the U.S. Bankruptcy Court for the Central District of California rejected arguments by CalPERS that the Bankruptcy Court should lift the automatic stay and require San Bernardino to pay pension obligations owed to the pension fund. In re City of San Bernardino, California, Case No. 12‑blk‑28006‑MJ , (Bankr. C.D. Cal. Dec. 21, 2012) (Docket No. 299).

August 31, 2012: Second Circuit Adopts Abuse of Discretion Standard of Review for Equitable Mootness Decisions

March 9, 2012: Publication of Dynegy Examiner’s Report

With companies facing significant distress due to vast over-leverage, debtors have increasingly turned to asset sales under Section 363 of the Bankruptcy Code, rather than Chapter 11 plans, to dispose of their assets quickly and begin the process of winding down their estates.  According to the UCLA-LoPucki Bankruptcy Research Database, less than 4 percent of all large, public company bankruptcies were resolved by substantial asset sales  from 1990-2000.  However, in the period from 2001-2010, that figure rose to nearly 20 percent – peaking in 2011 when 43 percent of large pu

California has seen a string of three Chapter 9 filings this year and faces a long line of distressed municipalities.  Given this backdrop, the California Public Employees’ Retirement System (“CalPERS”) figures to play a prominent role in the resolution of many of these situations (in or out of bankruptcy).  Thus, the bond‑buying public will scrutinize closely any steps that CalPERS takes to protect its claims in the Bankruptcy Court.