Chapter 15 of the Bankruptcy Code provides a framework through which representatives of foreign insolvency proceedings can commence ancillary U.S. proceedings and obtain relief from U.S. courts in aid of foreign restructurings. For a foreign insolvency proceeding to be recognized by a U.S. bankruptcy court under Chapter 15, the proceeding must, among other things, involve a “debtor” whose assets or affairs are subject to the control of the foreign court.
Earlier this year, we wrote here about the decision in I.D.H. Diamonds NV v Embee Diamond Technologies Inc., 2017 SKQB 79, where Mr. Justice Layh held:
Section 5 of the Securities Act of 1933 prohibits the sale of a security unless a registration statement is in effect. This prohibition on the sale of unregistered securities does not apply to exempt transactions. One such exemption is found in the Bankruptcy Code — section 1145 provides that securities issued under a plan of reorganization may be exempt from the registration requirements of the Securities Act. For debtors, the recent decision of Golden v. Mentor Capital, Inc., 2017 U.S. Dist. LEXIS 153415 (D. Ut. Sept.
In order to file for bankruptcy, a corporate entity must be legally authorized to do so. Whether the bankruptcy petition has been duly authorized is governed by state law and often depends on the entity’s governance documents. If a petition has not been properly authorized, creditors may seek its dismissal.
U.S. Bankruptcy Rule 9019 provides that on a motion brought by a trustee (and thus a chapter 11 debtor-in-possession as well) the court may approve a settlement. The prevailing view is that due to the court’s approval requirement, pre-court approval settlement agreements are enforceable by the debtor but not against the debtor. The District Court for the Eastern District of New York recently disagreed. It held that the statutory approval requirement is not an opportunity for the debtor to repudiate the settlement.
The Worker Adjustment and Retraining Notification (WARN) Act in the U.S. requires that employers give sixty days’ notice to its employees before effecting a mass layoff.
Affinity Credit Union 2013 v. Vortex Drilling Ltd. 2017 SKQB 228
Directors and officers (D&Os) of troubled companies should be highly sensitive to D&O insurance policies with Prior Act Exclusion. While policies with such exclusion may be cheaper, a recent decision by the U.S. Court of Appeal for the Eleventh Circuit raises the spectre that a court may hold a loss to have more than a coincidental causal connection with the officer’s conduct pre-policy period and make the (cheaper) coverage worthless.
Legislative changes in Singapore and the EU introduce pre-insolvency processes facilitating non-consensual debt restructurings or cram downs comparable to those already available in London and New York. In particular, the EU Recast Insolvency Regulation (the "Recast Regulation") came into effect on June 26, 2017, enhancing cross-border co-operation for applicable insolvency proceedings starting in the EU after that date.*
98% of the liabilities of Lehman Brothers International (Europe) (in administration) (“LBIE”) were denominated in non-sterling currencies. The fall in sterling after LBIE entered administration resulted in significant paper losses for creditors, which they sought to recover from the LBIE estate. The recent decision of the UK Supreme Court in Waterfall I refused to recognize such claims.*