The Court of Milan with a decision on 28 May 2014 addressed some heavily debated legal issues: the Bankruptcy Courtmay authorize the debtor to terminate credit facility agreements when the debtor submitted a pre-filing for concordato preventivo (known as “concordato con riserva”)?

The Case

A recent pair of opinions from New York and Pennsylvania shows the importance of evaluating all parts of director and officer (D&O) insurance coverage, down to each definition.  These cases, one holding for the insured and one for the insurer, demonstrate that a policy’s terms can be absolutely critical if the insured seeks indemnification for defense costs. 

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), requires trustees of multiemployer pension and benefit funds to collect contributions required to be made by contributing employers under their collective bargaining agreements (“CBAs”) with the labor union sponsoring the plans. This is not always an easy task—often, an employer is an incorporated entity with limited assets or financial resources to satisfy its contractual obligations.

The institution of composition with creditors enabling business continuity (Article 186-bis of the Bankruptcy Law) and its impact on the legislative framework of public contracts (on the matter see “Composition with creditors enabling business continuity in public contracts”, June 2013, in www.nctm.it/wp-content/uploads/2013/11/CPCP) have given rise to contrasting applications of case-law, and as matters stand, the institution is often applied in different ways.

L’istituto del concordato preventivo con continuità aziendale (art. 186-bis della legge fallimentare) e il suo impatto sul quadro normativo dei contratti pubblici (sul punto cfr. “Concordato preventivo con continuità aziendale nei contratti pubblici”, giugno 2013, in www.nctm.it/wp-content/uploads/2013/11/CPCP) hanno dato origine ad applicazioni di giurisprudenza contrastanti, che portano allo stato attuale ad identificare per esso diverse modalità applicative.

a) Continuità diretta e indiretta

Nella precedente esperienza applicativa del concordato, la conservazione dei complessi aziendali in esercizio assai di rado avveniva in capo allo stesso imprenditore, quanto piuttosto solo in via “indiretta”, attraverso la formale cessione ad un soggetto terzo, procedendo, prima del deposito della domanda di ammissione al concordato, alla concessione in affitto al fine di preservarne l'operatività.

The Ninth Circuit recently held that an employer who failed to pay $170,045 in withdrawal liability could discharge the liability in bankruptcy. Carpenters Pension Trust Fund v. Moxley, No. 11-16133 (9th Cir. August 20, 2013). In so ruling, the Court rejected the Fund’s argument that unpaid withdrawal liability constituted a plan asset.

Quin v. County of Kauai Dep't. of Transp., 2013 WL 3814916 (9th Cir. 2013)

The procedure of composition with creditors aimed at business continuity (“concordato preventivo con continuità aziendale”, provided by art. 186-bis of the Bankruptcy Law) has a major impact on the rules governing public contracts, above all with reference to the requirements requested both for the participation of economic operators in the public tender procedures and for their capacity to enter into agreements with public entities.

In In re: Nortel Networks Inc., No. 1:09-bk-10138 (Bankr. D. Del. 2013), Nortel Networks Inc. reached a settlement with over 3,000 of its retired employees for nearly $67 million. Nortel, a former telecom equipment maker, filed for bankruptcy in 2009. In the subsequent four years, Nortel sold off nearly all of its assets, but had been unable to reach a compromise with its retirees to terminate its benefit plans.