The New York State Legislature recently proposed a bill, entitled the Sovereign Debt Stability Act, [1] intended to facilitate sovereign debt restructuring.
As you know from our prior alerts, creditors of borrowers formed as Delaware LLCs (as opposed to corporations) lack standing under Delaware law to sue directors for breaching fiduciary duties even when, to the surprise of many, the LLC is insolvent. See our prior Alert. The disparity of substantive creditor rights depending entirely on corporate form results from two aspects of Delaware law.
For industry professionals in India, the Insolvency and Bankruptcy Code (IBC), 2016, has been a game-changer. The introduction of a formal framework for insolvency resolution has brought much-needed clarity and efficiency to dealing with financial distress. However, the 2019 Regulations introduced a new dimension - the ability for personal guarantors (PGs) to initiate insolvency proceedings. This has significantly impacted the role of Resolution Professionals (RPs).
There is a growing trend of bankruptcy courts approving structured dismissals of chapter 11 cases following a successful sale of a debtor’s assets under section 363 of the Bankruptcy Code. A structured dismissal is a cost‑effective way for a debtor to exit chapter 11 and is an alternative to (a) confirming a post‑sale liquidating plan, which is expensive and not always viable, or (b) converting the case to chapter 7, which introduces significant uncertainty and unpredictability with the appointment of a chapter 7 trustee to replace management.
When leveraged buyouts (“LBOs”) fail, the selling shareholders are litigation targets. A common suit is a claim by a bankruptcy trustee asserting constructive fraudulent transfer claims seeking to claw-back payments to the selling shareholders from the loan proceeds that financed the LBO.
In the concluding part of our exploration into the 2023 insolvency landscape, Part 5 delves into two significant cases that shape the dynamics of the Insolvency and Bankruptcy Code (IBC), offering insights into constitutional challenges and the treatment of properties acquired through auction sales.
Dilip B. Jiwrajka v. Union of India
Constitutional Validity of Sections 95 to 100 in Part III of IBC
Background:
Continuing our exploration of the evolving insolvency landscape in 2023, Part 4 examines two pivotal cases that further shape the legal framework surrounding insolvency proceedings in India.
M/S. Vistra ITCL (India) & Ors. v. Mr. Dinkar Venkatasubramanian & Anr
Secured Creditor Rights and Treatment of Pledged Shares
Continuing our exploration of the evolving insolvency landscape in 2023, Part 3 delves into two more landmark cases that further define the legal contours of insolvency proceedings in India.
M. Suresh Kumar Reddy vs. Canara Bank & Ors
Clarification on NCLT's Discretion in Admitting Section 7 Applications
As we continue our journey through the evolving insolvency landscape of 2023, we will delve into two landmark cases that further shaped the legal framework governing insolvency proceedings in India. Building upon the foundations laid in Part 1 of this series, we now turn our attention to M/s. Next Education India Pvt. Ltd. Vs. M/s. K12 Techno Services Pvt. Ltd and Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation India Ltd.
M/s. Next Education India Pvt. Ltd. Vs. M/s. K12 Techno Services Pvt. Ltd.
In the intricate tapestry of corporate insolvency, the year 2023 unfurled a saga of legal intricacies that left an indelible mark on the evolving insolvency landscape in India. This blog, the first of a five-part series, will be exploring the cases that not only shaped the insolvency regime but also defined pivotal aspects of the Insolvency and Bankruptcy Code (IBC). From the sectors affected to the geographical intricacies, we'll dissect the diverse facets that contributed to the evolution of insolvency laws. Additionally, we'll analyze two significant cases – RPS Infrastructure Ltd. v.