In brief
A selection of newly announced legislation and court decisions reinterpreting private law.
Contents
In brief
A selection of newly announced legislation and court decisions reinterpreting private law.
Draft law on preventive restructuring
The Galapagos Group has secured comprehensive affirmation of its 2019 debt restructuring (the “Restructuring”) from the English High Court. This decision is a significant step towards resolution of the highly contested restructuring, and provides market participants with further clarity and certainty when it comes to implementing lender-led transactions in future.
One of the benefits the US Bankruptcy Code offers debtors is the ability to assign freely contracts under which the debtor has ongoing performance obligations, even if the underlying contract contains a restriction or prohibition against such assignment. Section 365 of the Bankruptcy Code has its limits and does impose certain conditions to such assignment, such as the curing of defaults under the contract (other than so-called “ipso facto” defaults) and the requirement that the assignee be capable of future performance under the contract.
On June 27, 2023, the Official Committee of Unsecured Creditors (the “Committee”) in the BlockFi Chapter 11 bankruptcy reorganization case filed an Objection to the company’s Plan and essentially requested that the company be liquidated. The Official Committee is made up largely of 600,000 individual customers of BlockFi.
BlockFi is a wealth management and trading firm for cryptocurrency holders that first commenced operations in 2017. In July 2021, we wrote about BlockFi’s bumpy road to going public, even though its valuation had just hit $5 billion.
In brief
In Avanti Communications Ltd [2023] EWHC 940 (Ch), the English court revisited the vexed issue of fixed and floating charges. Notably, it is the first significant case since the landmark decision in Re Spectrum Plus Ltd [2005] UKHL 41 to do so.
The distinction between fixed and floating charges is economically important and affects the recoveries a secured creditor may expect to receive in an insolvent liquidation of the security provider.
Lehman Bros. Int'l (Europe) (In Admin.) v. AG Fin. Prod., Inc., No. 653284/2011 (Sup. Ct. N.Y. County May 17, 2023) [click for opinion]
In brief
The Court of Final Appeal (CFA), in its recent judgment in Re Guy Kwok-Hung Lam [2023] HKCFA 9 (link to judgment), has ruled on the proper approach towards a bankruptcy petition where the underlying dispute of the petition debt is subject to an exclusive jurisdiction clause (EJC).