On 12 June 2019, after a tense meeting with landlords and creditors, the company voluntary arrangements (CVAs) proposed by the Arcadia Group Ltd (Arcadia) were approved by the requisite majority of creditors, allowing the group to restructure its balance sheet and stave off, at least for the time being, a liquidation or administration proceeding.

Arcadia's decline

The banking reform package marks an important step toward the completion of the European post-crisis regulatory reforms

On May 20, 2019, the Supreme Court held in Mission Products Holdings, Inc. v. Tempnology, LLC that a debtor-licensor's rejection of a trademark license agreement does not "deprive the licensee of its rights to use the trademark." This holding resolves a longstanding circuit split in the Federal Courts of Appeal about the effects of bankruptcy on trademark licenses.

Background

Presented as a major measure of the five-year French presidential term, the law “on growth and business transformation”, also known as the PACTE Act, came into force on May 24th, 2019. Amongst the changes that were brought, some of them deserve a particular focus.

Two phases of the reform. The PACTE Act revises the insolvency legal framework and mainly empowers the executive to directly implement the EU insolvency directive and to reform the law on security interests within a period of two years.

The first phase of the reform

A Singaporean construction company in liquidation has successfully sued one of its former directors for failing to act in the best interests of the company, highlighting the importance of directors being aware of, and protecting against, potential personal liability for breach of duty.

Directors’ liability – the risk

On May 20, 2019, the U.S. Supreme Court issued a ruling of key significance for trademark licensing and for acquisitions, investments, financings and other transactions in which trademark licenses are a key value driver. In Mission Product Holdings, Inc. v. Tempnology, LLC,[1] the Court held, 8-1, that where the licensor of a trademark rejects a trademark license in bankruptcy, the rejection does not deprive the licensee of its rights to use the licensed trademark(s).

A bankruptcy court decision recently detailed how courts applying Bankruptcy Code (“Code”) § 303(i) can sanction creditors who “abuse… the power given to [them]… to file an involuntary bankruptcy petition.” In re Anmuth Holdings LLC, 2019 WL 1421169, * 1 (Bankr. E.D.N.Y. Mar. 27, 2019).

A bankruptcy trustee was “not entitled to avoid” a secured lender’s “lien under the Bankruptcy Code” (“Code”), held the U.S. Court of Appeals for the Seventh Circuit on Sept. 11, 2019. In re 180 Equipment, LLC, 2019 WL 4296751, *6 (7th Cir. Sept. 11, 2019). The court rejected the trustee’s argument that the lender’s “lien [was] avoidable because the [lender’s] financing statement failed to properly indicate the secured collateral.” Id., at 1.

The U.S. District Court for the Southern District of New York, on April 23, 2019, denied the litigation trustee’s motion for leave to file a sixth amended complaint that would have asserted constructive fraudulent transfer claims against 5,000 Tribune Company (“Tribune”) shareholders. In re Tribune Co. Fraudulent Conveyance Litigation, 2019 WL 1771786 (S.D.N.Y. April 23, 2019). The safe harbor of Bankruptcy Code (“Code”) § 546(e) barred the trustee’s proposed claims, held the court. Id., at * 12.

A worldwide moratorium is one of the most important protections and tools available to a debtor in the Singapore cross-border restructuring regime. A recent Singapore High Court case, Re: Zetta Jet Pte Ltd and Others (Asia Aviation Holdings Pte Ltd, intervener) [2019] SGHC 53 ("Re Zetta Jet (2)"), highlighted some important considerations relating to such a worldwide moratorium, in particular dealing with potential conflicts between different jurisdictions.

Singapore's Cross-border Restructuring Regime