In In re Smith, (B.A.P. 10th Cir., Aug. 18, 2020), the U.S. Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Tenth Circuit recently joined the majority of circuit courts of appeals in finding that a creditor seeking a judgment of nondischargeability must demonstrate that the injury caused by the prepetition debtor was both willful and malicious under Section 523(a)(6) of the Bankruptcy Code.

Factual Background

What's next for Australian businesses after the temporary COVID-19 insolvency law relief expires at the end of 2020? The government's new announcement sheds light on the next steps.

Key takeouts

The Australian Government has announced proposed major reforms to corporate insolvency laws for incorporated businesses with liabilities of less than $1 million that are facing financial distress.

Alerts and Updates

The Third Circuit’s ruling in In re Tribune provides important insight on what it means for a plan to unfairly discriminate.

COVID-19 Key Developments __ Top Story | COVID-19:Temporary amendments to insolvency laws extended to 31 December 2020 On 7 September The Treasurer and the Attorney General issued a joint statement announcing that the government plans to extend temporary insolvency and bankruptcy protections for businesses impacted by the COVID-19 pandemic until 31 December 2020. MinterEllison's Michael Hughes has released an article providing an expert summary of the changes. This can be accessed on our website here.

On 7 September 2020, the federal government announced that the temporary changes to the creditors' statutory demand and insolvent trading laws have been extended to 31 December 2020.

Key takeouts

In March 2020, the Commonwealth Government's early responses to the economic consequences of the COVID-19 included temporarily suspending and changing important elements of Australia's insolvency laws. These temporary changes were due to expire on 25 September 2020. The government has now announced that this period will be extended to 31 December 2020.

The Government has implemented significant temporary measures to ensure that our insolvency laws and processes do not expose companies and individuals to undue risk. This will hopefully avoid a potentially unprecedented wave of insolvencies.

Key takeouts

The Government announced a six month suspension of insolvent trading laws.

The relevant debts will still be due and payable by the company in the normal way.

Egregious cases of dishonesty and fraud will still be subject to criminal penalties.

Due to the COVID-19 pandemic, Mexican courts were closed for the past few months and only received urgent cases.

The COVID-19 pandemic has had a negative impact on the Mexican economy. As a result, Mexican courts have seen a rise in insolvency cases, which are not as common in Mexico compared to other jurisdictions, such as the United States. The rise of insolvency cases imposes new challenges to Mexican courts and Mexico’s laws.

In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that claim disallowance issues under Section 502(d) of the Bankruptcy Code "travel with" the claim, and not with the claimant. Declining to follow a published district court decision from the same federal district, the bankruptcy court found that section 502(d) applies to disallow a transferred claim regardless of whether the transferee acquired its claim through an assignment or an outright sale. See In re Firestar Diamond, 615 B.R. 161 (Bankr. S.D.N.Y. 2020).

Nearly two years after it was first passed in Parliament on 1 October 2018, the Insolvency, Restructuring and Dissolution Act (“IRDA”) has now come into operation on 30 July 2020. The IRDA not only unifies Singapore’s legislation in relation to personal and corporate insolvency and debt restructuring, but also introduces significant changes to the present regime.

In this update, we will highlight nine key changes of the new provisions of the IRDA.

1. Restriction of Ipso Facto Clauses in Insolvency/Restructuring Proceedings

The Federal Budget update focused on Australia's economic position and the impact of the Government's response to COVID-19 and the 2019 – 20 Bushfires. Though no new measures were specifically announced, there were some additional items for certain existing programmes.

Key forecasted Budget figures