On March 19, in a matter of first impression, the Third Circuit Court of Appeals (Court) held that triangular setoff is not permissible in bankruptcy due to Bankruptcy Code Section 553(a)’s mutuality requirement, and that parties cannot evade that requirement by contracting around it. See In re Orexigen Therapeutics, Inc., 990 F.3d 748 (3d Cir. 2021).

The COVID-19 pandemic is also keeping legislators on their toes, who are continuing to try to mitigate the impact of the pandemic on the economy. The focus was initially on the temporary suspension of the obligation to file for insolvency by the COVID-19 Insolvency Suspension Act (COVInsAG). Following on from this, with the Act on the Further Development of Restructuring and Insolvency Law (SanInsFoG), which came into force on 1 January 2021, the legislator has further modified obligations of conduct and, correspondingly, the liability of managing directors in the crisis of the company.

When is a loan not a loan? The SDNY Bankruptcy Court in In Re: Live Primary, LLC[1] held that a $6 million start-up loan was actually an equity contribution after analyzing the terms of the transaction and the intent of the parties. The court recharacterized the loan as equity given the alleged loan functioned as an equity investment would be expected to function.

On 22 October 2020, the UAE government made various changes to the UAE Bankruptcy Law*, including the concept of Emergency Financial Crisis (EFC). Subsequently, on 10 January 2021, the UAE Cabinet declared the existence of an EFC in the UAE. In this article, Partners Michael Morris and Keith Hutchison explore how this declaration may impact on debtors and creditors.

Emergency Financial Crisis

One of the key changes implemented was a power given to the UAE Cabinet to declare an EFC. An EFC is defined as:

2020 was a transformative year for the consumer financial services world. As we navigated an unprecedented volume of industry regulation, Troutman Pepper leveraged our decades of experience and legal know how to help clients find successful resolutions and stay ahead of the compliance curve.

A bill introduced by Democratic U.S. senators looks to make it easier for Americans to discharge student loans and medical debt. If passed as currently written, the Medical Bankruptcy Fairness Act of 2021 would drastically change the U.S. bankruptcy system by removing certain procedural hurdles that make the bankruptcy process complex and by creating a clearer path to discharging debts that impact millions of Americans.

On January 14, the Supreme Court ruled that more than a mere retention of estate property is needed for a party to violate the automatic stay, vacating and remanding a decision by the U.S. Court of Appeals for the Seventh Circuit (In re Fulton, 926 F.3d 916 (7th Cir. 2019)) that held that the City of Chicago (City) violated the automatic stay by retaining vehicles that were impounded before the filing of the owners’ bankruptcy petitions. See City of Chi. v. Fulton, 141 S. Ct. 585 (2021). The decision resolved a split among several circuit courts.

The emergence of a new, more infectious, Covid-19 variant and the imposition of ever more severe lockdowns extends the downside risk on the IMF’s recent outlook for the global economy and its warning of a ‘long, uneven road to recovery’.

The COVID-19 pandemic has brought disruption and economic hardship to several businesses around the globe. In Brazil, the effects of lockdown and restriction measures by the Governments have caused numerous companies to file for bankruptcy or judicial reorganisation, the latter being the legal restructuring instrument which aims to assist companies to continue their activities and avoid becoming bankrupt.

Relevant Aspects of the Judicial Reorganisation process

On October 28, 2020, FERC declined to abrogate or modify firm natural gas transportation service agreements (“Gulfport TSAs”) between Gulfport Energy Corporation (“Gulfport”) and Rockies Express Pipeline LLC (“Rockies Express”) in response to a Rockies Express petition anticipating a potential Gulfport bankruptcy filing. After an expedited paper hearing, FERC concluded that the public interest does not presently require any modification, and thus, that the Gulfport TSAs on file remain just and reasonable.