On February 25, 2020, the United States Supreme Court in Rodriguez v. Federal Deposit Insurance Corporation[1] struck down a judicial federal common law rule—known as the Bob Richards rule—that is used by courts to allocate tax refunds among members of a corporate affiliated group where the group does not have a written tax sharing agreement in place, or, at least in some federal Circuits, where an agreement fails to allocate the refunds unambiguously.
HEADLINES
- Default levels remain historically low at 1 per cent to 2 per cent
- Prevalence of cov-lite loans in Europe may be concealing some underperformance, but there are no conventional triggers for lenders to act
Despite concerns that the economic cycle is peaking, and the impact of geopolitical and trade volatility on corporate earnings, leveraged finance default rates show little sign of rising during the next 12 months.
On January 14, 2020, the Supreme Court of the United States issued a decision resolving the question of whether a motion for relief from the automatic stay constitutes a discrete dispute within the bankruptcy that creates a basis for a final appealable ruling, or whether it simply is a controversy that is part of the broader Chapter 11 case, such that appeals would not need to be taken until the conclusion of the Chapter 11 case.
Despite the sector's current strong performance, many survey respondents believe the industry needs even more capital and liquidity. In addition, most expect restructurings and insolvencies to increase in 2020
The robust funding environment and expectations of increased investment reflect the aviation industry's strong aggregate performance. In large parts of the sector, both liquidity and capital remain unconstrained, not least in an era of historically low financing costs.
The oil and gas industry in the United States is highly dependent upon an intricate set of agreements that allow oil and gas to be gathered from privately owned land. Historically, the dedication language in oil and gas gathering agreements — through which the rights to the oil or gas in specified land are dedicated — was viewed as being a covenant that ran with the land. That view was put to the test during the wave of oil and gas exploration company bankruptcies that began in 2014.
With cov-lite financings at record highs, debt holders will need to be proactive in maximising recoveries
Will the last person leaving please turn out the lites?
Cov-lite loans can leave lenders with limited restructuring options, but creative lenders will still find ways to bring debtors to the table, partners Ian Wallace and Christian Pilkington of global law firm White & Case LLP explain
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