There remain a number of issues in the proposed insolvency reforms that need careful deliberation, particularly where the Regulations have yet to be released for consideration.
In the latest saga concerning “covenants running with the land” and the rejection of midstream gathering agreements under section 365 of the Bankruptcy Code (the Code), the Honorable Christopher Sontchi, Chief Judge of the Delaware Bankruptcy Court (the Court), issued three1 decisions holding that certain of Extraction Oil & Gas, Inc.’s (Extraction) gathering agreements with its midstream service providers did not create real property interests and, thus, that Extraction could reject such gathering agreements in its chapter 11 bankruptcy proceedings.
The torrid pace of bankruptcy filings by U.S. businesses has ebbs and flows, but the tide is not receding. The economy continues to struggle under the weight of the COVID-19 pandemic.
There has not been any substantial change in the fundamentals of the business cycle and Washington has been unable to produce another round of stimuli. So, we need to be careful about drawing conclusions from any short term variance in the rate of bankruptcy filings.
In a not altogether unsurprising blow for aircraft lessors and financiers, an appeal against the earlier decision of the Federal Court of Australia on the interpretation of the phrase ‘give possession of the aircraft object to the creditor’ as used in Article XI of the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the Aircraft Protocol) in the context of an insolvency has been allowed by the Full Court and various original orders set aside.
On 12 August 2020, we wrote about three important judicial decisions of the courts in England and Singapore relating to the enforcement of arbitration agreements over claims arising under insolvency laws.
The new debtor-in-possession model for small business restructuring is aimed at allowing viable small businesses to seize the initiative to quickly restructure to survive the economic impact of COVID-19, but we need greater clarity on key elements of the proposed insolvency framework.
“Government gives businesses much-needed breathing space with extension of insolvency measures”
The UK government has announced an extension of the following temporary insolvency measures introduced by Corporate Insolvency and Governance Act (CIGA), 2020.
Highlights include:
Liquidators need to be mindful that a disclaimer of property may be challenged. The Supreme Court of Victoria underscored a key issue in establishing "prejudice" to creditors in a liquidation, holding that a disclaimer of property may be set aside where the liquidators are indemnified.
Residential aged care has recently been in the news for all the wrong reasons, with headlines due to the particularly heavy impact of COVID-19 on this sector, the interim findings of the Royal Commission into Aged Care Quality and Safety and the alarming declaration by Leading Age Services Australia that a pre-COVID-19 accounting review indicating that almost 200 nursing homes housing some 50,000 people were operating at an unacceptably high risk of insolvency – a finding supported by the recently released report by the Aged Care Financing Authority (ACFA) which found “near
Australia has now entered its first recession in 29 years, and the Australian Government has implemented a number of legislative reforms and other initiatives to support and provide temporary relief to businesses, including stimulus payments, enhanced asset write-off and flexibility in the application of the Corporations Act 2001 (Cth).