Yes, says the First Circuit. The First Circuit recently affirmed the District Court’s decision to deny a group of bondholders’ (the “Bondholders”) motion to have a trustee appointed for the Employees Retirement System of the Government of the Commonwealth of Puerto Rico (the “System”) under section 926 of the Bankruptcy Code. Section 926 of the Bankruptcy Code allows a court to appoint a trustee to pursue avoidance actions in Chapter 9 cases.

In the wake of the high profile collapse of the private equity firm Abraaj Capital, the Dubai International Financial Centre (“DIFC”) updated its insolvency regime with the introduction on June 13, 2019 of the new DIFC Insolvency Law (Law No.1 of 2019) (the “DIFC Insolvency Law”).

Disagreeing with the much-critiqued SDNY opinion in Enron, the SDNY bankruptcy court disallowed claims brought by secondary transferees because the original claimants allegedly received millions of dollars in fraudulent transfers and preferences from the Debtors that have not been repaid. Deepening the district spilt on the nature of Section 502(d) of the Bankruptcy Code, the Court held that the defense barring fraudulent transfer-tainted claims focuses on claims—not claimants—and cannot be “washed clean” by a subsequent transfer in the secondary market.

With the significant strain placed on market participants as a result of the combined impacts of the global COVID-19 pandemic, the oil price war and the ensuing liquidity and credit crunches, we expect that a number of enterprises in the United Arab Emirates ("UAE") will either be forced to carry out restructurings or otherwise undergo formal court-supervised insolvency processes.

A recent Sheriff Court judgment is the latest decision to consider the role and remit of the court reporter in a liquidation which, unusually, involved the court appointing two reporters.

In Scotland, the Insolvency (Scotland) (Receivership and Winding Up) Rules 2018 provide that where there is no creditors committee, the remuneration of a liquidator shall be fixed by the court. In practice, the court appoints a reporter to examine and audit the liquidator’s accounts and to report on the amount of remuneration to be paid.

On top of the multiple challenges hitting retail and leisure landlords and occupiers arising from COVID-19, the news that Intu has had to write down the value of its shopping centre portfolio by nearly £2 billion came as further bad news.

It seems that business disruption due to coronavirus is pretty inevitable. What should you as a company director be doing if the disruption means your business starts to suffer?

What changes for me as a director?

As a director, you know that you owe duties to the company. When the business starts heading towards insolvency, there is a change of emphasis and instead of doing what is best for the shareholders, you have to change and consider what the consequences of your actions will be for the company’s creditors.

Confirmation of a Chapter 11 plan generally requires the consent of each impaired class of creditors. A debtor can “cramdown” a plan over creditor dissent, however, as long as at least one class of impaired claims accepts the plan.

The consequences of an order or judgement being final or interlocutory are enormous. An order from an interlocutory order requires leave since these orders are not appealable as of right. In addition, a failure to obtain leave may result in the issue becoming moot. This is especially so when motions to lift the stay are involved: if the motion is denied and is not immediately appealable, by the time the case is concluded, the issues will most likely be moot.