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Recent Developments: Silicon Valley Bank and Signature Bank

After depositors rushed to withdraw funds from Silicon Valley Bank (SVB), on Friday, March 10, 2023, the US bank was closed by the California Department of Financial Protection and Innovation (DFPI), and the Federal Deposit Insurance Corporation (FDIC) was named receiver of the closed bank.

USA, Banking, Insolvency & Restructuring, Cooley LLP, Federal Deposit Insurance Corporation (USA), HSBC, Silicon Valley Bank
Winter Wears On: Celsius Court Rules That Certain Customer Deposits are Property of the Bankruptcy Estate

Introduction

USA, Banking, Insolvency & Restructuring, IT & Data Protection, Real Estate, Weil Gotshal & Manges LLP, Cryptocurrency, FTX
How Many Connections are Too Many? Bankruptcy Court Finds Multiple Attenuated Connections Not Enough to Warrant Disqualification of Debtors’ Professional

Introduction

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, United States bankruptcy court
Ultra IV: Make-Wholes, Never Say Never Again

Executive Summary

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Insolvency, U.S. Court of Appeals
The ‘Rule in West Mercia’: When Do Directors Owe a Duty to Their Company’s Creditors?

Since 1988, the ‘rule in West Mercia’ – so named after the West Mercia Safetywear v Dodd Court of Appeal case – has been the leading authority for when directors of financially stressed companies are subject to the so-called ‘creditor duty’, namely the duty to consider the interests of the company’s creditors.

USA, Company & Commercial, Insolvency & Restructuring, Litigation, Cooley LLP, Insolvency, Supreme Court of the United States
SEQUANA: UK Supreme Court Explanation of the “Creditor Duty”

Introduction

Today, the UK Supreme Court considered for the first time the existence, content and engagement of the so-called “creditor duty”: the alleged duty of a company’s directors to consider, or to act in accordance with, the interests of the company’s creditors when the company becomes insolvent, or when it approaches, or is at real risk of, insolvency.

United Kingdom, Company & Commercial, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Insolvency, UK Supreme Court
A Tale of Fraud and Overzealousness: How the Judicial Shrinkage of “Initial Transferee” Saved an Innocent Immigrant From a Corrupt Car Dealer and a Troublesome Trustee

What happens when a shady businessman transfers $1 million from one floundering car dealership to another via the bank account of an innocent immigrant? Will the first dealership’s future chapter 7 trustee be allowed to recover from the naïve newcomer as the “initial transferee” of a fraudulent transfer as per the strict letter of the law? Or will our brave courts of equity exercise their powers to prevent a most grave injustice?

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Recent Developments at the Intersection of Bankruptcy and Environmental Law

Retired U.S. Bankruptcy Judge Robert E. Gerber once observed that “issues as to the interplay between environmental law and bankruptcy are among the thorniest on the litigation map.” Difficulties navigating this interplay largely stem from the inherent conflict between the goals of bankruptcy and environmental laws, with the former aimed at providing debtors with a fresh start, while the latter cast a broad net to hold parties (even some innocent parties) responsible for past harm to the environment.

USA, Environment & Climate Change, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Supply chain, Mediation, US Environmental Protection Agency, US Congress, Supreme Court of the United States
A Foreign Entity May be Subject to U.S. Bankruptcy Court Jurisdiction Simply by Utilizing a U.S. Bank Account in a Transaction with Another Foreign Entity

A foreign (non-U.S.) company can be dragged unwillingly into a U.S. bankruptcy case if the bankruptcy court has “personal jurisdiction” over the company.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Bankruptcy, United States bankruptcy court
A Foreign Entity May be Subject to U.S. Bankruptcy Court Jurisdiction Simply by Utilizing a U.S. Bank Account in a Transaction with Another Foreign Entity

A foreign (non-U.S.) company can be dragged unwillingly into a U.S. bankruptcy case if the bankruptcy court has “personal jurisdiction” over the company.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, United States bankruptcy court