On July 19, 2024, Judge Michael Wiles of the US Bankruptcy Court for the Southern District of New York issued a ruling in In re Mercon Coffee Corporation, Case No. 23-11945, invalidating insider releases in a proposed chapter 11 plan on the basis that the releases were improper retention-related transfers.

Judge Wiles found that he could not approve the releases – even though the debtors had promised them and insiders had relied upon that promise – because the releases did not meet the strict requirements of Bankruptcy Code Section 503(c).

In Harrington v. Purdue Pharma, the US Supreme Court in a 5-4 decision held that the US Bankruptcy Code does not permit a debtor to confirm a chapter 11 plan that releases non-debtors from similar or related claims the creditors could assert directly against them.

Buying parts of a distressed company may offer great opportunities for buyers. When a company is struggling but not yet insolvent, external financing might dry up and the sale of non-core activities may be a last resort to generate fresh cash.

The Abu Dhabi Global Market (the “ADGM”) courts have recently handed down their decision in NMC Healthcare Limited & Others v Shetty & Others ([2024] ADGMCFI 0007). The decision deals with several important principles in relation to fraudulent/wrongful trading liabilities under ADGM law. Given the ADGM re-domiciliation (or continuation) regime, enabling companies incorporated elsewhere to be redomiciled to ADGM with relative ease, the decision is likely to be of interest beyond the borders of the ADGM.

In today's rapidly evolving business landscape, businesses find themselves at the intersection of technological innovation and geopolitical and economic turbulence. Despite the increased reliance on software systems and digital infrastructure, it remains peculiar that in many EU Member States there's still no clear framework for handling software licenses in insolvency.

In the recent decision Sian Participation v Halimeda (Sian), the Judicial Committee of the Privy Council (the Privy Council) held on a BVI appeal that a winding-up petition should not be stayed or dismissed merely because the underlying debt is subject to a generally-worded arbitration agreement.

In the most significant decision of the decade on a matter of U.S. bankruptcy law, the U.S. Supreme Court rendered its highly anticipated decision in Harrington v. Purdue Pharma L.P., 603 U.S. ____ (2024) on June 27, 2024, striking down the non-consensual third party releases that were the cornerstone of Purdue Pharma's Chapter 11 Plan of Reorganization by a vote of 5-4. In doing so, the Court said:

Bygge- og anlægsbranchen har i de seneste år oplevet en kraftig stigning i antallet af konkurser og toppede foreløbigt i 2023 med hele 1.282 erklærede konkurser. Da konkurserne ofte er forbundet med store tab, hvis de indtræder under et igangværende byggeri, har tendensen i stigende grad aktualiseret en belysning af de muligheder, der er for at sikre sig imod sådanne tab.

Insolvency proceedings and avoidance actions play a significant role in safeguarding creditors' interests and maximising the insolvency estate in Türkiye. The European Commission's Proposal for a Directive (COM (2022)702) aims to harmonise contestation rights in insolvency across EU member states. Although Türkiye is not an EU member states, Türkiye has similar avoidance actions regulated under its own insolvency legislation, the Turkish Enforcement and Bankruptcy Law (EBL).

Overview

Regarding the draft Directive proposed by the European Commission that harmonises facets of insolvency law, it is worth noting that the draft Directive does not prevent EU member states from maintaining or adopting provisions that offer greater protection to creditors than those outlined in the Directive. Since the existing Croatian law framework on contestation rights provides numerous and detailed rules that go beyond the draft Directive, its implementation is not expected to require extensive or substantial modifications.