The costs regime in insolvency litigation is outdated and not fit for purpose, especially when it comes to the clawback claims designed to allow officeholders to restore the insolvent estate when assets have been deliberately dissipated. Many such claims can become uneconomical to run, especially where recipients of dissipated assets have no desire to preserve them but every incentive to diminish them with their own costs. Often a sale or assignment is the last resort to seek justice against wrongdoers in such situations.

On September 27, 2022, Phoenix Services Topco LLC, a steel mill service provider with approximately 2,600 employees, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 22-10906). The company reports $500 million to $1 billion in both assets and liabilities.

After 10 sanctioned Restructuring Plans (and one declined) it is evident that valuation is key to supporting the court’s decision making process and a focal point for potential challenge.

On August 28, 2022, Hauppauge, N.Y.-based Packable Holdings, LLC, a privately-owned tech-enabled e-commerce company, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 22-10797). The company reports $100 million to $500 million in both assets and liabilities.

On August 23, 2022, College Park, Georgia-based ExpressJet Airlines LLC, a leading regional airline connecting millions of passengers to North America monthly, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 22-10787). The company reports $10 million to $50 million in both assets and liabilities.

On August 23, 2022 (the “Petition Date”), Rochester, New York-based Carestream Health, Inc.

On August 6, 2022, OSG Group Holdings, Inc., which provides transactional, marketing, and payment solutions to various industries, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 22-10718). The company also filed a prepackaged plan of reorganization.

Contradicting the popular opinion that inflation is an issue that’s set to stick around for a while yet, an article in the Times this weekend put forward an interesting opposing view - that inflation has already peaked and is likely to be on the way down.

Those of us in the restructuring community are all too aware of the “ripple-out” effect caused by the financial deterioration and failures of multi-national companies on the wider supply chain and customers in general.

There has been much commentary recently on the treatment by lenders of individuals and small and medium sized enterprises (SMEs). Indeed, the FCA has made its expectations very clear – that lenders should fully support those experiencing financial difficulty.

As a restructuring professional and insolvency practitioner, and a former regulator, I have some competing views and thoughts on what this means and whether it is the optimum approach in the longer term.