The United States Supreme Court recently denied certiorari to an Eleventh Circuit appeal which would have addressed the issue of whether section 506(d) of the Bankruptcy Code permits a chapter 7 debt to “strip off”¹ a wholly unsecured junior lien in Bank of America, N.A. v. Sinkfield.² As a result, wholly unsecured junior creditors will continue to suffer the harsh consequence of having its junior lien completely “stripped off” in Eleventh Circuit bankruptcy cases, despite other Circuits around the country holding to the contrary.

According to its Explanatory Notes, RD Act (Order in Council) 4/2014, of 7 March, adopting  urgent measures on business debt refinancing and restructuring, aims to facilitate the financial  repair and recovery of companies facing an economic crisis. To this end, a set of rules varying in  scope and significance have been laid down, which I here discuss with regards to the treatment  reserved to loans granted under refinancing agreements - as provided by the Spanish Insolvency  Act (IA) - and their signatory creditors.

This paper sets out to make some considerations on the position of creditors holding real security (security in rem) within para-insolvency and insolvency refinancing procedures introduced or modified by Royal Decree Act (Order in Council) 4/2012 adopting urgent measures on business debt refinancing and restructuring. I will avoid the new scope of the avoidance of preinsolvency transactions under arts. 71 bis and 72 of the Spanish Insolvency Act (IA), which will be the subject of a subsequent paper. Nor will the calculation of the “value of (real) security” be discussed here.

Bankruptcy practitioners are anxiously awaiting a U.S. Supreme Court ruling that will determine whether a party can waive its right to trial before an Article III tribunal.

In homologated refinancing agreements

El Real Decreto-ley 11/2013, de 2 de agosto, para la protección de los trabajadores a tiempo parcial y otras medidas urgentes en el orden económico y social, albergó diversas disposiciones de tipo so- cio-laboral, algunas de ellas referidas a reestructu- raciones laborales en empresas concursadas.

Approach

Approach

Art. 172 IA determines  the  pronouncements the at-fault classification ruling must contain, judicial pronouncements that constitute true civil penalties.¹

Thus, after classifying the insolvency proceedings as at-fault, the people affected by the classification and the accomplices, on whom the orders will fall, have to be determined. Then, arts. 172 and 172 bis IA establish that the judgment must order:

This paper is essentially a commentary on the changes introduced by Royal Decree Act (Order in Council) 4/2014 in respect of applications for clawback (avoidance) orders against or within refinancing agreements.

1. Non-homologated qualified majority refinancing agreements

Arbitrary differences