The Delaware Bankruptcy Court held that comity outweighed the parties' contractual choice of jurisdiction. Although claims would be allowed to be brought in the US, any recoveries would need to be pursued in Italian insolvency proceedings.

Energy Coal, an Italian company engaged in trading coal and other raw materials, commenced debt restructuring, or Concordato Preventivo ("Italian Proceedings"), proceedings in Italy in 2015. The restructuring plan allowed for the business to continue as a going concern and pay creditors from future revenues.

The High Court held that "final determination" signifies the very last stage of any proceedings, without the chance to appeal. Sberbank were therefore still bound by their undertaking to take no further steps in an arbitration against the Company.

Providing an exception to the axiom that no good deed goes unpunished, a Texas bankruptcy court recently declared nondischargeable a debt owed to a guarantor who had been forced to pay the debtor’s defaulted student loan.

What happened?

Toys R Us' failure was blamed on competition from online retailers, changing consumer spending habits as a result of inflation and increases in business rates.

Nevertheless, competing toy retailer The Entertainer announced sales growth of 6.8% and an increase in pre-tax profits of 37% last week. It does not show signs of succumbing to the pressures that led to the failure of Toys R Us.

How could retailers of similar goods, operating in the same market conditions have had such disparate experiences?

Article Summary:

In Wright (and another) (as joint liquidators of SHB Realisations Ltd (formerly BHS Ltd) (in liquidation)) v Prudential Assurance Company Ltd, the court held that, when the BHS CVA terminated, the landlord was entitled to claim the full rent due under its lease. With more recent retail CVAs seeking to push the envelope even further, is the continued compromise of landlord creditors post-CVA the next issue to be tested in the courts?

Two big name high street retailers entered Administration in February: On 28 February, Toys R Us, whose financial struggles had been attracting media attention (not least from Ashfords' Restructuring & Insolvency Bulletin) since before Christmas, finally threw in the towel and appointed Administrators from Moorfields; while electrical goods firm Maplin also appointed PwC on the same day.

The saga of Carillion's collapse continued this month, as it transpired that accountancy giants EY had prepared plans to restructure the troubled construction firm as early as mid-December 2017.

In the typical day-to-day experience in bankruptcy proceedings, the debtor’s ability to assume or reject executory contracts and leases under Section 365 of the Bankruptcy Code is seen from the sometimes-unfortunate perspective of the creditor.

In our recent article on restructuring options for retail businesses, we outlined how a number of companies in that sector had implemented or were considering Company Voluntary Arrangements (CVAs).

Last April, we updated you that the Supreme Court had granted review of In re The Village at Lakeridge, LLC, 814 F.3d 993 (9th Cir. 2016). Our most recent post is here.