On April 4, 2020, the State of New York will join ranks with the vast majority of other states implementing a version of the Uniform Voidable Transactions Act (the “UVTA”). Only Maryland continues to apply the Uniform Fraudulent Conveyance Act (the “UFCA”), a law with its origins as early as 1918. A handful of other states that did not adopt the UFCA instead retain their varied, state-specific transfer laws. The uniform legislation was first promulgated in 1984 as an amendment to the UFCA, referred to as the Uniform Fraudulent Transfer Act (“UFTA”).

A new wave of bankruptcy filings for leveraged oil and gas companies has begun and this time it may involve more prepacks and less optimism. Beginning in late 2015 and continuing through 2017, downtown Houston was filled with bankruptcy lawyers. Highly leveraged exploration and production (or E&P) companies had become crippled by falling oil prices and the resulting impact on the value of their producing and non-producing reserves in their borrowing bases.

Shareholders of Austrian limited liability companies usually want to have influence over whom they are associated with. That's why shareholders often agree on a pre-emptive right (Aufgriffsrecht) to purchase existing shares in certain cases, e.g. in case of insolvency proceedings against a shareholder. However, according to the recent case law of the Regional Court of Linz on limited liability companies, pre-emptive rights to purchase the shares of an insolvent shareholder are invalid and unenforceable.

Know your co-shareholders

The Austrian Supreme Court has recently found that insolvency related avoidance claims can be sold. This may open a whole new business segment and will most certainly have a material impact on defendants in avoidance proceedings.

Assignability of insolvency related avoidance claims

Going forward, lenders must take precautionary measures to protect themselves. Anticipating the risk of a U.S. bankruptcy case is a crucial first step.

A financial crisis and situations where insolvency is imminent are not only challenging for a company and its management, but also entail significant liability risks for management in the case of subsequent insolvency proceedings. Payments made after a company has become materially insolvent (i.e. illiquid or overindebted under Austrian insolvency law), but before the 60-day deadline for filing for insolvency has expired, are risky. Which payments are allowed according to the Austrian Supreme Court?

Scope of liability

The list of successful restructurings outside insolvency proceedings is as long as it is confidential. Every year, companies of all sizes are stabilised and sustainably restructured without the stigma of insolvency proceedings. However, until now there has been no European legal framework for pre-insolvency restructurings and only a few national laws explicitly provide for the possibility of such preventive restructurings. This will change now.

The court noted that the DOJ might prosecute cannabis-related businesses under the CSA, notwithstanding plan confirmation. Thus, Garvin may have foreclosed any future DOJ CSA-based noneconomic objections to cannabis reorganizations.

Contrary to the Bankruptcy Court’s ruling, the District Court concluded that California's liquidated damages statute does not apply to the default interest rate provision.

This is a favorable decision for commercial secured lenders. Although the ruling is not controlling on other bankruptcy courts as it is a trial court level ruling, courts may certainly consider it when presented with similar issues.

In In re 1111 Myrtle Avenue Group, LLC (Bankr. S.D.N.Y. 2019), a New York bankruptcy court held that a default interest rate provision of 7 percent was enforceable and not a penalty against a debtor, which retained significant equity postbankruptcy.

Background