Executive summary

A recent decision of the High Court sanctioned restructuring schemes for two companies in the Solar 21 renewable energy investment group showing once again effective and efficient restructuring tools available in Ireland for companies in need. Below we discuss the main features of the Judgment and the criteria required to be met in order for the schemes to be legally binding and effective pursuant to Part 9 of the Companies Act 2014 (as amended) (the Act).

What is a Part 9 Scheme of Arrangement?

I’m reading a U.S. circuit court’s recent bankruptcy opinion that cites Stern v. Marshall, 564 U.S. 462 (2011). I’m startled by that and blurt out (to myself), “Who cites Stern anymore?!” and “Is Stern still a thing?!” and “I thought Stern has been narrowed to nearly nothing?!”

What creditor would ever want to be an involuntary bankruptcy petitioner under these statements of facts and law:

Oral arguments at the U.S. Supreme Court in Harrington v. Purdue Pharma L.P. happened on December 4, 2023. Here is a link to the official transcript of such arguments.

My Impression

I’ve read that transcript—and still don’t know what the Court is going to do.

But based on the comments/questions of the justices (which are summarized and compiled below), I do have one impression:

Desperate people do desperate things. And desperation leads even good people astray.

So it is in the world of financial stress. Desperate people do desperate things: like providing sloppy financial statements to creditors, failing to assure that all collateral proceeds go to the proper place, and fudging on the truth here-and-there.

A free-standing moratorium for financially distressed but ultimately viable companies was introduced in 2020. It is sometimes called a Part A1 moratorium, after the part of the Insolvency Act 1986 which provides for it.

We hear a lot these days about bankruptcy venue abuse via corporate-entity manipulation shortly before bankruptcy filing.

Here’s the latest opinion on that subject—which allows Debtor’s choice of venue to stand, based on a newly-created entity:

Is an involuntary bankruptcy, filed by an owner/creditor of the Debtor, filed in good faith or in bad faith?

That’s the question before the U.S. Supreme Court on which it denied certiorari on October 30, 2023 (Wortley v. Juranitch, Case No. 23-211).

Here’s the gist of the case.

The U.S. Trustee is on a crusade to eradicate every type of third-party release from all Chapter 11 bankruptcy plans—no matter what the facts or circumstances might be.

It’s a policy based on the idea that, if the Bankruptcy Code doesn’t specifically and explicitly authorize something, then that something cannot be done . . . ever . . . under any circumstances . . . no matter what . . . period . . . end of story.

We now have another manifestation of that bright-line and unyielding position. Fortunately, the Bankruptcy Court rejects the U.S. Trustee’s objection.

A bankruptcy court has jurisdiction to dismiss a legal malpractice claim of non-debtor plaintiffs against non-debtor attorneys.

That’s the ruling in Murray v. Willkie Farr & Gallagher LLP (In re Murray Energy Holdings Co.), Adv. Pro. No. 22-2007, Southern Ohio Bankruptcy Court (decided October 5, 2023, Doc. 89)—appeal is pending.

Summary of Issue and Ruling