The Supreme Court issued a landmark and potentially far-reaching decision in Harrington v. Purdue Pharma L.P., No. 23-124 (“Purdue”), on June 27, 2024. We set forth the facts and our initial observations below, with a more complete description of the decision at the end of this bulletin.
What Did the Court Decide?
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.
In what might prove to be an important ruling, on April 12th the Bankruptcy Court for the District of Delaware ruled that a secured creditor had, before the debtor filed bankruptcy, properly exercised an irrevocable proxy to change the management of the debtor’s subsidiary. The Court also ruled that the creditor had not violated the automatic stay by refusing to relinquish the proxy following the bankruptcy filing. Though a clear victory for secured creditors, the Court’s ruling hinges on a well drafted proxy provision.
The Facts of the Case
On October 31, 2021, PWM Property Management LLC and eight of its affiliates (collectively, “PWM” or the “Debtors”) filed chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware.[1] The Debtors hold direct or indirect interests in two real properties—245 Park Avenue in New York City (“245 Park”) and 181 West Madison Street in Chicago (the “Chicago Property”). S.L.
On December 16, 2021, U.S.
Corporate restructuring transactions are often motivated by tax planning, though there are usually other legitimate corporate needs to be achieved. The Corporations Tax Code of Japan contains provisions granting the government power to deny the effects of corporate restructuring for tax purposes—e.g., Article 132 (for family company group transactions) and Article 132-2 (for intra-group mergers and other reorganizations). In recent years, Japanese courts have been trying to clarify the standard for denying the tax effect of certain restructuring transactions.
PH Insight for News and Analysis of the Latest Developments from the Courts of England and Wales for August 2021
In this edition. . .
Prior to the end of the transition period (31 December 2020), U.K. restructuring tools enjoyed universal and automatic recognition throughout the European Union. However, the legal landscape is now tainted with uncertainty and the legal position regarding recognition is more complex. Recognition is important to ensure that a scheme of arrangement, a restructuring plan, or a company voluntary arrangement (“CVA”) is fully binding on parties and to minimise the risk of challenge.
Summary
In the course of implementing EU directive 2019/1023 of 20 June 2019 on preventive restructuring frameworks, the German legislator intends[1], among other things, to provide for (i) a Preventive Restructuring Plan as flexible restructuring tool, (ii) further relief in connection with the COVID-19 pandemic, and to make small but important changes to the general provisions of German insolvency code.