Preferences are a common issue in bankruptcy proceedings. A general overview of preferences in bankruptcy can be found here.
The Bankruptcy Code provides several affirmative defenses to assist creditors in mitigating or eliminating their preference exposure. We have previously addressed the new value defense2 and the ordinary course of business defense3. This article will briefly address another common affirmative defense: the contemporaneous exchange defense.
TO BE OR NOT TO BE (SOLVENT) - A COMPARATIVE ANALYSIS OF SINGAPORE, UK, US, AND AUSTRALIA ON RECOGNISING FOREIGN PROCEEDINGS UNDER THE UNCITRAL MODEL LAW PIERRE DZAKPASU, ANNE JESUDASON, FLORENCE LI The recent case of Ascentra Holdings, Inc v. SPGK Pte Ltd [2023] SGCA 32 (Ascentra) has drawn a line in the sand in the Singapore court's interpretation of the UNCITRAL Model Law on Cross-Border Insolvency (UNCITRAL Model Law), as incorporated in the Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) to create the Singapore Model Law.
Summary
In the first appeal of a restructuring plan under Part 26A Companies Act 2006, the English Court of Appeal unanimously set aside the first instance decision sanctioning the plan proposed by AGPS BondCo PLC, part of the Adler real estate group1.
Serving as the stalking horse bidder in a Section 363 sale1 can provide a buyer with financial and legal protections, as well as better position the buyer to ultimately acquire the debtor's assets.
General Overview
There are two mechanisms through which a creditor may net amounts owed to the debtor against amounts owed by the debtor -- setoff and recoupment. These mechanisms are distinct and are treated very differently in a bankruptcy setting.
Key Issues
Setoff. Setoff is a right based in state law that allows parties to apply their mutual debts against each other. These rights are preserved in bankruptcy through Section 553(a) of the Bankruptcy Code, which does not create any federal right of setoff, but leaves such state law rights undisturbed.
What happens to funds recovered by the trustee after the final plan payment is made in a chapter 13 case? According to the U.S. Bankruptcy Court for the District of Iowa, absent a plan provision providing otherwise, those funds revert to the debtors.
Creditors face many risks when a company files for bankruptcy. One such risk is preference exposure, which is where the company seeks to claw back funds paid to a creditor before the company files for bankruptcy. A general overview of preferences in bankruptcy can be found here.
The debt purchaser in In re McIntosh argued that because it was enforcing a debt that was not listed correctly on the debtor’s bankruptcy schedules, it was entitled to assume the debt had not been discharged. The U.S.
Under the Absolute Priority Rule, for a Chapter 11 plan to be confirmable, claims of a higher priority must be paid in full in order for lower priority claims to receive any recovery, and all creditors must be paid in full in order for equity interest holders to retain any interest in the debtor, or receive any distribution under the plan. The Absolute Priority Rule is embodied in Section 1129(b)(2) of the Bankruptcy Code.
In a landmark decision,[1] the Delaware Court of Chancery addressed, for the first time, the precise duties that a controlling stockholder owes, and the standard of review that will apply, when a controlling stockholder takes actions to block a board of directors’ desired course of action — such as by removing directors or enacting a bylaw requiring a unanimous vote for board action