From 1 December 2020 new changes to the priority rules in insolvency will have a real impact on the recoveries achieved by secured creditors on the insolvency of a debtor. These new rules give HMRC priority above floating charge holders and ordinary unsecured creditors in relation to tax collected by an insolvent company from third parties, such as VAT, PAYE income tax and NICs.

 In a decision published October 19, 2020, Judge Frank J. Bailey of the U.S. Bankruptcy Court for the District of Massachusetts found that an Indian tribe was not subject to the Bankruptcy Code’s automatic stay.

Our regular round-up of recent developments and topics for your radar, news on training and networking events for in-house counsel, and an update on our legal tech initiatives.

HIGHLIGHTS

Over the summer, we wrote about why health care companies may want to consider buying assets out of bankruptcy, taking advantage of the Bankruptcy Code Section 363 sale process (a “363 Sale”). We are back with our second post, to provide more detail to the process and discuss some pros and cons of 363 Sales.

The COVID-19 pandemic has caused unparalleled disruption to the judiciary, which has been presented with logistical hurdles as well as acute legal issues to tackle.

This article summarises some notable recent caselaw concerning the fallout from the pandemic. Broadly, the judiciary has adopted a strict but fair approach when parties have sought leniency due to the impact of COVID-19. Courts have not looked kindly on those who are seen to be unfairly capitalising on the disruption but, where merited, parties have been granted clemency.

The U.S. Court of Appeals for the Third Circuit recently confirmed that bankruptcy plans need not always recognize subordination agreements among creditors.

Companies with an international footprint will need to ensure that their tax residence (and other taxable presence) is not affected by travel restrictions imposed in response to the COVID-19 pandemic. HMRC has published guidance on these issues, which is somewhat helpful if less definitive than the approach of a number of other jurisdictions. Careful thought will be needed where senior executives/management are unable to travel, and so are required to carry on their role or participate in key management or commercial decision-making in a different jurisdiction from usual.

This two-part blog series discusses why buyers looking to make strategic purchases in the health care industry might want to take advantage of the Bankruptcy Code Section 363 sale process (363 Sale) and the pros and cons of buying assets out of bankruptcy through a 363 Sale.

On 25 June 2020, new legislation came into force in the UK which makes it much more difficult for suppliers to terminate contracts where the customer is subject to an insolvency procedure. In this briefing, we highlight the key issues that both suppliers and customers should be aware of and consider whether you should amend termination provisions in new contracts.

Welcome to the inaugural edition of our new newsletter, which is intended to capture the key developments in the English disputes arena over the past three months. We hope that you will find it an interesting read, whether you are a litigator, either in private practice or in-house, or a generalist wanting to keep abreast of the goings on in this space. We also hope that you will pass it on to any of your colleagues who may find it useful.