With the increase in global trade and business, often involving complex corporate structures in multiple jurisdictions, we expect to see a significant increase in cross-border insolvency and restructuring matters in coming years. This is especially the case with rapid advancements in technology and digital change driving “borderless” transactions and investments in every industry.
From television commercials to naming rights for arenas, the topic of cryptocurrency has been hard to avoid. While cryptocurrency may be virtual, its creation or ’mining’ occurs in the real world. This mining poses a credit risk for utility companies, given the incredible amount of electricity required to operate a “mining” facility. For example, crypto mining company Core Scientific, Inc. and its related companies, recently filed Chapter 11 bankruptcy cases where they reported their average monthly utility bills were more than $24.5 million dollars.
Just weeks after the “implosion” of cryptocurrency exchange FTX, credit services provider BlockFi filed for Chapter 11 protection with the United States Bankruptcy Court for the District of New Jersey, indicating that it is burdened with billions of dollars of estimated liabilities and more than 100,000 creditors.
In many corporate Chapter 11 cases, unsecured creditors of the debtor have few, if any, assets they may use to satisfy their claims. A debtor’s hard assets, cash and cash equivalents are almost always subject to liens in favor of secured creditors, leaving no tangible assets for unsecured creditors. If unsecured creditors are to receive any value in return for their claims, this value usually must be realized from the debtor’s causes of action.
Federal appeals courts have been split on whether filing a proof of claim in bankruptcy on old debt, or obligations that have expired under a statute of limitations, violates the Fair Debt Collection Practices Act. In a victory for debt collectors and the debt buying industry, the Supreme Court clarified this issue on May 15, 2017 with its decision in Midland Funding, LLC v. Johnson, No. 16-348.
A March 8 2016 decision of the influential Bankruptcy Court for the Southern District of New York has attracted attention from – and caused concern for – owners of pipelines and other midstream assets, as well as lenders to midstream and upstream lenders across the United States.
The oil and gas industry is in the midst of a transition, with prices falling as supply outpaces current demand. With global economic weakness and growing competition from alternative energy sources, the expectation is for continued headwinds. Low prices have caused numerous producers to default on their indebtedness and many to seek financial restructuring, including filing for bankruptcy protection.