After depositors rushed to withdraw funds from Silicon Valley Bank (SVB), on Friday, March 10, 2023, the US bank was closed by the California Department of Financial Protection and Innovation (DFPI), and the Federal Deposit Insurance Corporation (FDIC) was named receiver of the closed bank.

Since 1988, the ‘rule in West Mercia’ – so named after the West Mercia Safetywear v Dodd Court of Appeal case – has been the leading authority for when directors of financially stressed companies are subject to the so-called ‘creditor duty’, namely the duty to consider the interests of the company’s creditors.

As discussed in an earlier post called “Moving Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2022,” various dollar amounts in the Bankruptcy Code and related statutory provisions were increased for cases filed on or after today, April 1, 2022.

An official notice from the Judicial Conference of the United States was just published announcing that certain dollar amounts in the Bankruptcy Code will be increased a larger than usual 10.973% this time for new cases filed on or after April 1, 2022.

Each year amendments are made to the Federal Rules of Bankruptcy Procedure, which govern how bankruptcy cases are managed. The amendments address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. The rule amendments are ultimately adopted by the U.S. Supreme Court and technically subject to Congressional disapproval.

After bringing dozens of criminal charges against Paycheck Protection Program loan recipients in recent months, on January 12, the US Department of Justice announced its first civil settlement resolving allegations of PPP loan fraud.

This article was originally published in Law360. Any opinions in this article are not those of Winston & Strawn or its clients. The opinions in this article are the authors' opinions only.

In Pension Benefit Guaranty Corp. v. 50509 Marine LLC et al.[1] the U.S. Court of Appeals for the Eleventh Circuit held that the Pension Benefit Guaranty Corp. can recover an employer's defined benefit pension plan termination liability--often millions of dollars--from controlled group members that did not even exist when the contributing employer liquidated years earlier.[2]

In In re Nine West LBO Securities Litigation (Case No. 20-2941) (S.D.N.Y. Dec. 4, 2020), a federal district court denied in part a motion to dismiss claims brought by the Nine West liquidating trustee against former directors (the "Defendants") of The Jones Group, Inc. (the "Company"), Nine West's predecessor, for, among other things, (i) breaches of their fiduciary duties of care and loyalty, and (ii) aiding and abetting breaches of fiduciary duties. The litigation arises from the 2014 LBO of the Company by a private equity sponsor ("Buyer").

Each year amendments are made to the rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The amendments address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. The rule amendments are ultimately adopted by the U.S. Supreme Court and technically subject to Congressional disapproval.

In the wake of the recent economic downturn caused by the COVID-19 pandemic, there will likely be a sharp rise in bankruptcy filings by businesses seeking to obtain relief from the burdens of excessive debt.^[1] The bankruptcy code is designed to provide debtors relief and protection from creditors, which includes the Internal Revenue Service (“IRS”).