Another interesting case on schemes around the issue of insolvency. A judgment handed down yesterday by Snowden J in MAB Leasing Limited (a Malaysia Airlines leasing company) "parked" the issue of whether a Part 26 scheme (note, not a Part 26A plan) was an insolvency related event under the Cape Town Convention and Aircraft Protocol, as there was unanimous creditor consent. At the earlier convening hearing, Zacaroli J, without needing to decide the issue, stated that the company counsel's skeleton provided a "powerful case for concluding that the [Cape Town Convention] did not apply".

Very interesting judgment yesterday from Zacaroli J in "gategroup Guarantee Limited" (with a small g) that Part 26A plans are insolvency proceedings and therefore fall outside European civil and commercial jurisdictional rules. Pre-Brexit case law tells us that Part 26 schemes are probably not insolvency proceedings and are therefore capable of falling within those rules. Zacaroli J found that the "financial difficulties" threshold conditions to Part 26A plans (which do not exist for Part 26 schemes) made a significant difference.

Prior to December 23, 2020, it had been unclear whether a court had the jurisdiction to grant an order assigning a contract without counterparty consent, on application by a court-appointed receiver (a “Receiver”).

In a year quite unlike any other, the landscape of Canadian restructuring law saw significant developments in 2020. The COVID-19 crisis put novel issues before the courts, challenged businesses in unforeseen ways and saw various supports and concessions offered to struggling businesses from governments and creditors. Ultimately, while the supports and concessions enabled many businesses to avoid insolvency proceedings in 2020, many others sought the protection of an insolvency filing, with industries such as the retail industry particularly impacted.

The Ontario Court of Appeal, in 7636156 Canada Inc. (Re), 2020 ONCA 681 (“7636156”), recently affirmed the autonomy of documentary letters of credit as valid security for the obligations of a tenant under a commercial lease when that lease is disclaimed by the tenant or the tenant’s trustee in bankruptcy.

The oil and gas industry in the United States is highly dependent upon an intricate set of agreements that allow oil and gas to be gathered from privately owned land. Historically, the dedication language in oil and gas gathering agreements—through which the rights to the oil or gas in specified land are dedicated—was viewed as being a covenant that ran with the land. That view was put to the test during the wave of oil and gas exploration company bankruptcies that began in 2014.

The past year has seen some important judgments and hearings (with judgment awaited at the time of writing) on several subjects, some of which may shape the future of UK litigation for years to come. Litigants and litigators have also spent a good part of the year getting used to a new way of conducting litigation—remotely and fully electronically. Starting with contract law, while there has been little by way of Supreme Court guidance on the subject, the lower courts continue to issue interesting judgments.

On August 26, 2020, the Court of Appeals for the Third Circuit held that the Bankruptcy Code does not require subordination agreements to be strictly enforced in order for a court to confirm a cramdown plan, so long as the plan does not discriminate unfairly.

Dans l’affaire de la Loi sur les arrangements avec les créanciers des compagnies (la « Lacc ») relative à Groupe Dynamite, le juge Kalichman de la Cour supérieure du Québec prononce un jugement au sujet de l’obligation d’un débiteur de payer un loyer post-dépôt dans un contexte où il ne peut pas utiliser les lieux loués.

Financial Restructuring & Insolvency/Finance A New Restructuring Plan

16 SEPTEMBER 2020

IN THIS ISSUE:

Introduction Process for Implementing a Plan Availability of the Plan Disenfranchisement of Creditors or Members Numerosity Cross-class Cram Down Moratorium Veto Pensions Opinion