A member state’s court entertaining an insolvency proceeding has exclusive jurisdiction to entertain clawback actions brought within the proceeding

On June 6 the Council of the European Union approved the Proposal for a Directive of the European Parliament and of the Council on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures.

This marks an end to the legislative process of the Directive, which is now pending to be publisged in the Official Journal of the European Union.

Put concisely, the approved directive imposes an obligation on member states to implement harmonized legislation on:

Selection of the main restructuring and insolvency judgments.

Requirements for subordination of claims notified out of time

For a claim notified out of time not to be classed as subordinate, it must meet the following tests: (i) it must appear in the debtors’ documents; (ii) it must be due and payable; (iii) the fact that it exists and is payable must be beyond doubt; and (iv) it cannot be overlooked by the insolvency practitioner when drawing up the list of creditors by reason of the circumstances of the case.

On May 20, 2019, the U.S. Supreme Court issued an 8-1 ruling in the case of Mission Product Holdings, Inc. v. Tempnology, LLC. The decision resolves a circuit split, holding that a licensee may retain its right to use licensed trademarks, notwithstanding the debtor-licensor’s rejection of the contract in bankruptcy. The Supreme Court’s decision has potentially far-reaching implications.

In normal circumstances, a director’s primary duty (owed to the company, not the company’s shareholders or the corporate group) is to promote the success of the company for the benefit of its shareholders as a whole. When a company enters a period of financial distress (the so-called “zone of insolvency”) there is a shift of emphasis in the duties of the directors: directors must consider the interests of the company’s creditors and, depending on the extent of the financial distress, may need to prioritise such interests over those of its members.

When a company enters a period of financial distress, directors must consider the interests of the company’s creditors and, depending on the extent of the financial distress, may need to prioritise such interests over those of its members. In such distressed situations, the key current heads of liability directors may face (for which they may potentially incur personal liabilities) include wrongful trading, fraudulent trading, misfeasance and breach of duty.

Under article 55 of the Spanish Insolvency Law, it is not allowed after the insolvency order to take individual enforcement action or initiate tax or administrative enforced collection proceedings against the debtor’s property; although until approval of the liquidation plan, administrative enforcement proceedings in which an attachment order has been issued are allowed to continue, together with enforcement actions for employee claims in which the insolvent company's assets have been attached, although certain restrictions apply.

El Tribunal Supremo concluye que la prohibición de ejecuciones una vez abierta la fase de liquidación opera tanto sobre créditos concursales, como sobre los créditos contra la masa, se trate de créditos administrativos o de otros acreedores.

On April 23, 2019, Ropes & Gray, representing a large group of shareholder defendants, won a decision in the U.S. District Court for the Southern District of New York that provides potential fraudulent transfer protection for payments made to shareholders in leveraged buyouts, stock redemptions and other securities transactions.

Constructive Fraudulent Transfer Claims and the Securities Safe Harbor

Un deber fiduciario es una obligación de índole legal consistente en velar por los intereses y actuar en beneficio de otra persona.