On December 27, 2020, in response to the economic distress caused by the COVID-19 pandemic and to supplement the CARES Act enacted in March 2020, the Consolidated Appropriations Act of 2021 (the “Act”) was enacted. In addition to providing $900 billion in pandemic relief, the Act benefits both debtors and creditors by temporarily modifying the following sections of the Bankruptcy Code, which may be of particular interest to creditors:
If a creditor is holding property of a party that files bankruptcy, is it “exercising control over” such property (and violating the automatic stay) by refusing the debtor’s turnover demands? According to the Supreme Court, the answer is no – instead, the stay under Section 362(a)(3) of the Bankruptcy Code only applies to affirmative acts that disturb the status quo as of the filing date. In other words, the mere retention of property of a debtor after the filing of a bankruptcy case does not violate the automatic stay.
On December 1, 2020, certain amendments to the Federal Rules of Bankruptcy Procedure take effect. The amendments largely modify rules governing bankruptcy appeals, but also impact Rules 2002 and 2004. The changes are as follows:
The streamlining of the Schemes of Arrangement (Schemes) process under the Companies Act 2014 (CA 2014) provides an option for corporate restructuring and recovery, which may not have been a feasible for some companies or corporate groups in the past.
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.
Most companies now hold large volumes of personal data – it is almost inevitable due to the interplay between technology and business. This includes companies that become insolvent, but what obligations does a liquidator have in relation to the personal data held by a company?
Notice to stakeholders: Withdrawal of the United Kingdom and EU rules in the field of civil justice and private international law.
On 27 August 2020, the European Commission published a ‘Notice to Stakeholders’ setting out how EU laws in the areas of civil justice and private international law will apply when the Brexit transition period ends on the 31 December 2020.
This Notice replaces an earlier notice published in January 2019 and a document with questions and answers published in April 2019.
As many companies continue to suffer economic hardship due to the ongoing COVID-19 pandemic, it is likely that mergers and acquisitions of companies and assets in distress will feature as a significant proportion of overall M&A transactions in Ireland during the coming months.
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 U.S. Court of Appeals for the Third Circuit recently confirmed that bankruptcy plans need not always recognize subordination agreements among creditors.