Summary

We reported in December 2014 that the amendments to the EC Regulation on Insolvency Proceeding (the Recast Regulation) were virtually finalised and agreed between the various legislative organs of the European Union.

Finally after several years, the debate is now over and the European Parliament has now approved the final text – broadly as it was in December 2014. The outcome is good news for cross border corporate restructurings and insolvencies around Europe, but it will not come into force for over two years.

Next steps

Summary of recommended changes to the Bankruptcy Code from the ABI Commission to Study the Reform of Chapter 11

Summary of recommended changes

This chart summarizes the Recommendations in the Commission’s Report that relate to or would have an impact on creditors’ rights.

Background

Investment

Direct statements

Much Anticipated Extraterritoriality Ruling Could Have Far-Ranging Implications

District Court decides that in a broker-dealer liquidation governed by SIPA, where a trustee seeks to recover funds paid to the defendant under Sections 548(a) and 550(a) of the Bankruptcy Code, which impose liability for fraudulent conveyances where the defendant lacked good faith in receiving the funds: (i) the defendant’s good faith is evaluated under a subjective willful blindness standard, and (ii) to survive a motion to dismiss, the trustee bringing the fraudulent conveyance claims must plead facts sufficient to establish the defendant’s lack of good faith.

Norton Rose Fulbright’s Employment and Labour Team in Montréal raised a preliminary objection against an arbitrator’s jurisdiction on the basis of orders rendered pursuant to the Companies’ Creditors Arrangement Act (“CCAA“), which was upheld and led to the dismissal of the grievance.

Snapshot

The Court of Appeal’s judgment in Jervis v Pillar Denton Limited (Game Station) [2014] EWCA Civ 180 on 24 February 2014 has brought welcome clarity to when rent qualifies as an administration expense.

The Court of Appeal has ruled that:

Summary

Eastman Kodak Corporation (Kodak US), the US parent of the Kodak group, filed for chapter 11 protection in the US on 19 January 2012. It successfully emerged from bankruptcy on 3 September 2013 as a new restructured technology company focused on imaging for businesses. Many other Kodak companies throughout the world were able to avoid following in their parent’s footsteps and were maintained as going concern businesses while the US bankruptcy process was ongoing.

On 17 September, TPR updated its trustee toolkit to include a new learning module: ‘Winding up a DB scheme, insolvent employer: wind-up or transfer to PPF’. The module, now available to download, covers DB scheme closures where the employer is insolvent.

On 24 July 2013, the Supreme Court handed down its long-awaited judgment in the Nortel/Lehman case on where a contribution notice (CN) or financial support direction (FSD) issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings (eg administration) ranks in the order of priority of payment.