Alex Jay, Head of Insolvency and Asset Recovery, discusses how companies can protect themselves from rising insolvency risks as businesses begin to emerge from the pandemic and commercial pressure increases.
Insolvency risk can affect businesses and individuals in a number of ways. Markets can turn rapidly – think for example of the recent spate of energy company failures – and can catch you off guard.
22 October 2021 sees the return of winding-up petitions without heavy restrictions. It marks the first day in 18 months that a creditor could present a winding-up petition without having to consider the financial implications of Covid-19 on the company.
A recent High Court judgment has provided some clarity on issues arising from the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the Regulations 2020”). Partner Alex Jay and Senior Paralegal Aarti Chadda examine the judgment and its interpretation of the Regulations 2020.
The year is 2012, and the biotech you founded has just received FDA approval for a wildly promising product with significant differentiation from other products in its class. You only have 35 employees, but begin to build a lean, incentive-based salesforce to launch your novel commercialization strategy built on a specialty distribution model, high-touch reimbursement support, aggressive marketing tactics, and premium pricing. Hiring a compliance officer is not a priority at this time.
In In re KarcreditLLC [1], the U.S. Bankruptcy Court for the Western District of Louisiana was faced with two lenders with claims to one original stock certificate as collateral.
Investor frauds never go away
Non-professional investors are often enticed by promises of high returns to place money into schemes that turn out to be scams. These schemes adopt many guises and forms. But do they ever change, and how likely are they to emerge as the expected post-Covid economic uncertainty takes effect? Head of Insolvency and Asset Recovery Alex Jay examines investor fraud and how the insolvency process can help victims recover some of their money.
Increases in fraud and insolvency predicted
On July 15, the U.S. Court of Appeals for the Second Circuit ruled that private student loans are not explicitly exempt from a debtor’s Chapter 7 bankruptcy discharge.
The Uniform Commercial Code was established to provide predictability and conformity in commercial transactions. Certain states have adopted nonstandard UCC provisions, which create an unreliable and unpredictable market for secured creditors. In addition, statutory liens, which are liens arising under federal and state statute, may disrupt the priority of secured creditors’ interest in a debtor’s assets. In re First River Energy, L.L.C. (986 F.3d 914, 917 (5th Cir.
Business interruption (BI) insurance protects businesses against loss suffered as a result of a slowdown or suspension of operations. This includes loss of profits, loan payments and certain expenditure, such as rent.
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).