On October 3, 2017, Bankruptcy Judge Laurie Selber Silverstein of the United States Bankruptcy Court for the District of Delaware issued a decision holding that the Bankruptcy Court had constitutional authority to approve third-party releases in a final order confirming a plan of reorganization.

A recent decision by the German Federal Fiscal Court (BFH) has caused significant concerns in the restructuring community because it will severely complicate future restructurings in Germany or even make them impossible overall. In its decision dated 28 November 2016 (GrS 1/15, published on 8 February 2017) the court held that the so- called restructuring decree (circular on taxation of restructuring profits / Sanierungserlass) dated 27 March 2003 (IV A 6 S 2140 8/03, BStBl. I 2003, 240, amended by circular letter dated 22 December 2009 (IV C 9 S 4140/07/10001-01, BStBl.

When you are focused on the day-to-day running of a business, it can be all too easy to miss the warning signs that you may be at risk of insolvency. Often, the signs might be interpreted as a “blip” or a “minor issue” paired with the assumption that the company can trade out of it. In this article, Stephen Young identifies some of the key warning signs that directors should be aware of.

A set of new insolvency rules are coming into force, as of April 6 2017, as Stephen Young explains in the following bulletin. In short, the previous insolvency rules that have been in force since 1986 no longer apply and instead a whole new set of rules now must be used.

The new Insolvency (England & Wales) 2016 rules will apply to all cases, both existing and new.

In short, the main changes are as follows:

1. All of the Parts and Numbering of the old rules have been completely changed so each type of insolvency has its own new Part.

The Court of Appeal has recently overturned the commonly held belief that a validation order would normally be made if the disposition made by a company subject to a winding up petition was done so in good faith and in the ordinary course of business at a time when the parties were unaware of the existence of the petition.

1. The starting point

Section 127 Insolvency Act 1986 provides:

In less than a week after its bankruptcy filing, a debtor was able to obtain confirmation of its prepackaged plan of reorganization in the Bankruptcy Court for the Southern District of New York. In allowing the case to be confirmed on a compressed timeframe that was unprecedented for cases filed in the Southern District of New York, the Bankruptcy Court held that the 28-day notice period for confirmation of a chapter 11 plan could run coextensively with the period under which creditor votes on the plan were solicited prior to the commencement of the bankruptcy case.

The law on debt restructurings and liability management is back to where it was. Yesterday, the Second Circuit Court of Appeals reversed the controversial District Court decisions in the Marblegate-Education Management bondholder litigation. The case attracted wide-spread attention in financial markets, and we discussed it in an earlier client alert.

The European Commission has published draft legislative proposals which would require large non-EU banking firms with EU operations to establish an intermediate holding company in the EU. The proposed rules are similar to US requirements for certain non-US banking organizations to establish an intermediate holding company in the US. This note discusses the impact of the proposals on foreign banking groups and their restructuring plans, with a particular reference to US banks. It also considers the UK’s position in light of Brexit.

Introduction

RBS announced last month that SME customers will automatically be entitled to a refund of the fees that they were charged whilst being managed by the Bank’s Global Restructuring Group (GRG) between 2008 and 2013 following a review by the FCA.

This offer follows on from the payments RBS has made in recent years for the mis-selling of PPI and interest rate swap products which has resulted in £1.8 billion of redress costs.

This article examines possible consequences for SMEs that were in GRG during the relevant period which now are, or have been, in an insolvency procedure.

On November 17, 2016, the United States Court of Appeals for the Third Circuit issued a decision in which it held that holders of first lien notes and second lien notes of Energy Future Intermediate Holding Company LLC and EFIH Finance Inc. (together, “EFIH”) are entitled to payment of make-whole claims. In its reversal of the Delaware Bankruptcy Court and Delaware District Court, the Third Circuit focused largely on the distinction that the payment in question was tied to a “redemption” of the bonds, and was not a “prepayment” premium.