Liquidators have more certainty about their ability to disclaim the environmental liabilities and responsibilities of a company in liquidation.

“The right of setoff … allows entities to apply their mutual debts against each other to avoid the pointless exercise of ‘making A pay B when B owes A.’” held the Seventh Circuit on Aug. 17, 2018. Berg v. Social Security Administration, 900 F.3d 864, 868 (7th Cir. 2018). But the Bankruptcy Code (“Code”) limits “a creditor’s right of setoff during the ninety-day period prior to the” date of bankruptcy, said the court. Id.

When faced with multiple class action threats, there is little downside in a company giving consideration to a creditors’ scheme of arrangement to achieve a quicker and cheaper resolution of the underlying claims.

While much attention earlier this year was paid to the introduction of the safe harbour for directors, the second element in Australia's major reforms to insolvency laws ‒ the moratorium on the enforcement of ipso facto clauses (including self-executing clauses) ‒ is now in effect.

Some 25 years after Harmer promised a faster, more efficient and commercial approach for dealing with failed and failing companies, Australia's highest court has this morning confirmed that creditors can contractually bind a company and all stakeholders to a moratorium extension via a properly formed holding DOCA (Mighty River International Limited v Hughes [2018] HCA 38; Clayton Utz acted for the successful Deed Administrators of Mesa Minerals Limited).

Although we have been operating under the Personal Property Securities Act 2009 (Cth) (PPSA) for a number of years, this area of law continues to generate disputes because of the complexity of the legislative regime and the ramifications of being an unsecured creditor of an insolvent entity.

Changes to Singapore's statutory regime for schemes of arrangement, which came into effect in May 2017, are aimed at placing Singapore on the map as an international debt restructuring hub.

Debtor in possession financing in the US has continued to rise, particularly in the context of retail insolvencies. In Australia, we have seen a number of high profile retail collapses in recent years. Can DIP financing solve the woes of struggling retailers in Australia?

A defendant creditor in a preference suit may offset (a) the amount of later “new value” (i.e., additional goods) it gave the Chapter 11 debtor against (b) the debtor’s earlier preferential payment to the creditor, held the U.S. Court of Appeals for the Eleventh Circuit on Aug. 14, 2018. In re BFW Liquidation LLC, 2018 WL 3850101 (11th Cir. Aug. 14, 2018). Even when the creditor was paid for the new goods, stressed the court, Bankruptcy Code (“Code”) “§ 547(c)(4) does not require new value to remain unpaid.” Id., at *5.

Section 37A can be used by future, contingent and prospective creditors to recover assets, meaning the transferor need not be indebted at the time of the transfer.

Recovering assets from a debtor is usually done via the recovery provisions in the Corporations Act 2001 (Cth) or theBankruptcy Act 1966 (Cth), but there is another option, at least in New South Wales, which offers creditors, insolvency practitioners and any prejudiced parties a useful alternative. A recent case demonstrates its advantages (Lardis v Lakis [2018] NSWCA 113; Clayton Utz acted for the successful creditor).