On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 (CAA 2021). Similar to the March 2020 CARES Act, several temporary changes to the Bankruptcy Code are included in Title X of the CAA 2021. Below, we examine four of the CAA 2021’s most significant changes to consumer bankruptcy laws.

Introduction

Editor, Jonathan Spearing

Welcome to the ninth edition of Commodities in Focus (CIF); our bulletin for clients engaged in the production, trading, carriage, storage and financing of commodities.

On December 9, 2020, Congressional Democrats, including Elizabeth Warren (D-Mass.) and Jerrold Nadler (D-N.Y.), proposed sweeping legislation that would overhaul consumer bankruptcy law. The proposed changes generally make it easier for consumers to access the bankruptcy system and discharge their debts. Below is a discussion of 10 critical changes proposed in the Consumer Bankruptcy Reform Act of 2020 (CBRA).

1. Chapters 7 and 13 Are Replaced with New Chapter 10

In a notable decision interpreting the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Bankruptcy Court for the Middle District of Alabama held that Chapter 13 debtors behind on their payments before March 2020 may seek modification of their plan if they suffered from COVID-19 related financial distress.

Recent months have brought unprecedented challenges to businesses, with no sector immune to the economic repercussions of the pandemic. Yet despite headline news of certain high-profile restructurings and insolvencies, such as Virgin Atlantic, Debenhams, and Edinburgh Woollen Mill, it seems the emergency measures implemented by the UK Government have, to a degree, staved off wide spread economic collapse that may otherwise have been inevitable.

Translating to “now for then,” nunc pro tunc orders grant backdated relief. Such orders are common in bankruptcy cases. For instance, bankruptcy courts often enter orders retroactively approving retention of professionals, and in certain cases even granting retroactive relief from the automatic stay.

This note considers how the recent changes to UK insolvency law introduced by the Corporate Insolvency and Governance Act 2020 ("CIGA") might affect those involved in the sale and purchase of commodities. In particular, it looks at the impact of Section 14 of CIGA on contracts for the supply of goods or services, and on the typical rights and remedies of the seller / supplier under such contracts.

In the latest edition of Going concerns, Stephenson Harwood's Asia restructuring and insolvency team touch on key changes in Singapore brought about by the recent Singapore Insolvency, Restructuring and Dissolution Act 2018 (and where applicable, the impact on the shipping industry), and the positions in Singapore and Hong Kong on winding up petitions vs arbitration clauses.

Content

Get to know the Insolvency, Restructuring and Dissolution Act 2018 ("IRDA") Winding up petitions vs arbitration clauses (SG) The prima facie standard of review prevails

Your former employee sues you, but your employee-plaintiff filed for bankruptcy. You diligently research the bankruptcy filings and discover the employee did not disclose the lawsuit against you in those filings, which are sworn to under oath. You might have a winner to get out of the case, right? Well, it is not quite that simple, according to a recent ruling in Georgia.

Background

The Finance Act 2020 received Royal Assent on 22 July 2020 and will restore HMRC as a preferential creditor on insolvency (Crown Preference) with effect from 1 December 2020.

There had been speculation that the Government would shelve or at least postpone the reintroduction of Crown Preference in the wake of Covid-19. In fact, even before the pandemic, the proposals had been widely criticised by the restructuring and insolvency industry as harmful to the UK’s corporate rescue culture.