The Act of January 31, 2009 on the continuity of companies (Loi relative à la continuité des enterprises/Wet betreffende de continuïteit van de ondernemingen, the "Act") entered into force on April 1, 2009.
When doing business with a Luxembourg company in financial distress, the counterpart should be aware that certain transactions are at risk.
Doing business with a bankrupt Luxembourg company
A bankrupt Luxembourg company is automatically deprived from the administration of its assets. All transactions must be entered into by the receiver in bankruptcy acting in the name and on behalf of the bankrupt company.
In cross border financing transactions, a secured creditor should be aware of Dutch law specifics when dealing with a Dutch obligor in financial distress. Below is a highlighted list of specifics for a secured creditor planning to foreclose on its security or when seeking to improve its security position.
Improving security position
Existing Dutch security documents typically provide for possibilities for improving the position of a secured creditor in case of an event of default.
Getting a tighter grip on collateral
On October 13 2008 the Amsterdam District Court declared the emergency regulations underthe Financial Supervision Act applicable to the Dutch branch of Landsbanki (Icesave).(1) This update looks at:
Chapter 15 of the United States Bankruptcy Code, 11 U.S.C § 101 et seq., which incorporates most of the provisions of the United Nations’ Model Law on Cross-Border Insolvency,[1] was enacted as part of the Bankruptcy Abuse and Consumer Protection Act of 2005. Chapter 15 replaced former 11 U.S.C. § 304, which was been enacted in 1978 to provide specific procedures by which a representative in a foreign bankruptcy proceeding could obtain relief in U.S. courts to facilitate the foreign bankruptcy proceeding.
The Business Continuity Act of 31 January 2009 (the “Act”) creates a variety of flexible tools to promote business recovery and turnaround. In addition to an updated judicial reorganization procedure (i.e., a reorganization overseen by the court), the Act also introduces several interesting options for out-of-court workouts and preventive measures to promote business recovery.
Out-of-court agreements
Entry into force on 1 April 2009 of the new Act on the continuity of companies
The Act of 31 January 2009 on the continuity of companies (Loi relative à la continuité des enterprises/Wet betreffende de continuïteit van de ondernemingen, the "Act") entered into force on 1 April 2009.
When an insurance company becomes insolvent, one key issue is the extent to which the insurer's liquidator may recover prior payments made by the insurer. On February 23, 2009, the Supreme Court of Pennsylvania issued a significant decision limiting such recoveries. The court held that payments made by a failed Pennsylvania insurance company in the ordinary course of business are not recoverable by the statutory liquidator of the insolvent insurer.
On February 23, 2009, the Supreme Court of Pennsylvania issued a decision finding that payments made by a failed Pennsylvania insurance company in the ordinary course of business are not recoverable by the statutory liquidator of the insolvent insurer because the payments were not on account of an "antecedent debt" as that term is used in the voidable preference provision of Pennsylvania's Insurance Act.
On 9 February 2009, the Act of 31 January 2009 on the continuity of companies (Loi relative à la continuité des entreprises/Wet betreffende de continuïteit van de ondernemingen, the "Act") was published in the Belgian State Gazette.
The Act – which actually consists of two separate acts for technical reasons - will replace the unsuccessful Act of 17 July 1997 on composition with creditors.