Congress enacted the ordinary course of business defense to the avoidance of preferential transfers to protect recurring, customary transactions in order to encourage the continuation of business with and the extension of credit to a financially distressed customer.

To deepen government reform and improve government efficiency, the State Council of the People's Republic of China recently released the Plans for Government Institutional Reform and Function Change (the Restructuring Plan), and was approved by People’s Congress at its first session and it took effect on March 14, 2013.

Bankruptcy Code Section 503(b)(9) litigations have sometimes yield "shocking results". There is no pun intended here. This article discusses a recent case where the United States Bankruptcy Court for the District of Montana waded into the spine tingling issue of whether electricity is a good that is subject to Section 503(b)(9) administrative priority status.

Large businesses and organizations that self-insure their legally mandated insurance requirements often use “fronting” policies in which the policyholder must reimburse insurers for all losses and expenses paid on the policyholder’s behalf. These policyholders must furnish substantial collateral to secure repayment, typically, enough to pay many years’ worth of actual and anticipated claims. This can amount to hundreds of millions of dollars, and typically exacerbates cash flow and balance sheet problems for policyholders under financial stress.

In In the Matter of Castleton Plaza, LP,¹ the Court of Appeals for the Seventh Circuit held that a new value plan that leaves creditor claims unpaid must be subjected to a market test if the new value is contributed by an insider. The decision by the Seventh Circuit expanded the competition requirement to insiders whether or not the insider is a holder of a claim or interest against the debtor.

International structures as used by multinational companies typically could include limited partnerships or general partnerships. If the Netherlands is involved in these international structures, these partnerships may be set up in such a way that they qualify as transparent for Dutch tax purposes. Further, partnerships could be used to manage the recognition of taxable income (for example, the so called CV‐BV structures). ThisGT Alert may be helpful in further managing and controlling the tax risks within such structures.

Rejecting the formalistic approach, the Delaware Bankruptcy Court in Indianapolis Downs, LLC¹ focused on the policies underlying the idea of the disclosure statement to uphold a post-petition lock-up agreement, entered into before approval of a disclosure statement, with sophisticated financial players who had access to the material information that the disclosure statement would have provided.

In a measured opinion hewing closely to standard principles of contract interpretation, the United States Court of Appeals for the Second Circuit in NML Capital, Ltd. v. Republic of Argentina, No. 12-105, slip op. (2d Cir. Oct. 26, 2012), rejected the notion that a sovereign may issue bonds governed by New York state law and subject to the jurisdiction of the state’s courts, and then restructure those bonds in a manner that violates New York state law.

Becoming the first Court of Appeals to address an issue that has divided the bankruptcy and district courts, the Ninth Circuit adopted a forceful view of Stern v. Marshall,1 to hold in In re Bellingham Insurance Agency, Inc.2 that absent the parties’ consent, the limitations imposed by Article III of the Constitution deprive a bankruptcy judge of the constitutional authority to enter judgment on fraudulent transfer claims brought against parties who have not filed proofs of claim.