“The discharge of claims in bankruptcy applies with no less force to claims that are meritorious, sympathetic, or diligently pursued. Though the result may chafe one’s innate sense of fairness, not all unfairness represents a violation of due process.”
On March 19, 2021, the United States Court of Appeals for the Third Circuit issued a unanimous decision[1] affirming that the mutuality requirement of section 553(a) of the Bankruptcy Code must be strictly construed and, therefore, that triangular setoffs are not permissible in bankruptcy.
There were big changes in 2020 in the world of restructuring and insolvency legislation with the introduction of two new restructuring tools: the Moratorium and the Restructuring Plan, as well as the reintroduction of Crown preference.
The COVID-19 pandemic together with Brexit have meant many commercial relationships have had to stop or risk having to do so in the future. Are you ready to deal with what happens if any of your key contracts terminate?
No contract is 100% ‘Brexit-proof’. The current uncertainty about whether there will or won’t be a trade deal with the EU makes it unclear what contracts will be profitable and which won’t in 2021. For many businesses, some of their contractual relationships may well become untenable in the period after 11pm on 31 December 2020.
New legislation has come into effect which extends the applicability of certain temporary provisions under the Corporate Insolvency and Governance Act 2020 (“CIGA”). But what does this mean for businesses?
In several ways, businesses can continue to make use of the breathing space provisions brought in by CIGA to support their day-to-day work in keeping their companies afloat during the pandemic.
The Judge in the Sunbird scheme of arrangement sanction hearing has declined to sanction the scheme due to the “paucity of information” provided by the company to the creditors ahead of the creditor vote.
The Judge criticised the company’s general approach to the way in which it engaged with creditors, particularly those whom the directors felt would be obstructive to the scheme’s progress. In general terms, the Judge commented on the practice of lock-up agreements and highlighted concerns with the payment of lock-up fees.
Jonathon Crook of Shoosmiths discusses the recent decision of the Court of Appeal in Secretary of State for Business Enterprise and Industrial Strategy v PAG Asset Preservation Limited in which the Court of Appeal dismissed a public interest challenge to a scheme for the mitigation of business rates on empty property and where he acted for the successful companies.
In a decision arising out of Tribune’s 2008 bankruptcy, the United States Court of Appeals for the Third Circuit recently issued a decision affirming confirmation of the media conglomerate’s chapter 11 plan over objections raised by senior noteholders who contended that the plan violated their rights under the Bankruptcy Code by not according them the full benefit of their prepetition subordination agreements with other creditors.
A new Act, the Corporate Insolvency and Governance Act 2020, restricts many suppliers’ rights to exit commercial agreements due to restructuring or insolvency-related causes, even where those rights are expressly set out in the contract.
Since the release of the film Titanic in 1997, debate has persisted whether Rose could have shifted over slightly to let Jack onto the driftwood after they found themselves thrown from the sinking ship into the North Atlantic. Was there space? Would they both have frozen? Who knows.
The Corporate Insolvency and Governance Act 2020 received Royal Assent on 26 June 2020. Regulations have been introduced which give the Pension Protection Fund (the PPF) certain rights.