In the March 2025 edition of the Restructuring Department Bulletin, we highlight recent decisions and developments impacting the restructuring arena and share the latest news on the Paul, Weiss Restructuring Department.

• In one of the most high-profile and hotly-watched cases in the London restructuring market, on 18 February 2025, the English High Court approved the restructuring plan proposed by Thames Water.
• The Court gave permission to appeal the Court’s order to a group of challenging junior creditors, a subordinated creditor and Liberal Democrat MP Charlie Maynard, with the Court of Appeal due to sit from 11 to 13 March 2025.

Bankruptcy-remote LLC Agreement Did Not Impermissibly Restrict

LLC’s Right to File Bankruptcy

In re 301 W. North Ave., LLC, Case No. 24-02741 (Bankr. N.D. Ill.

Jan. 6, 2025), the Bankruptcy Court dismissed the chapter 11 case

of a Delaware limited liability company for “cause” under section

1112(b) of the Bankruptcy Code because the company had not been

properly authorized to file for chapter 11 relief. The court found that

the underlying LLC agreement prohibited the company from filing a

Paul, Weiss Named Chapter 11 Firm of the Year in Global Restructuring Review Awards

Global Restructuring Review (GRR) recognized Paul, Weiss as the “Chapter 11 Firm of the Year” in its 2024 GRR Awards, which honor the most impressive restructuring practices and individuals of the past year. The firm was recognized for its role advising in several major chapter 11 matters, including the restructurings of Hornblower, Lumileds, Revlon and Rite Aid, among others

Brian Hermann Discusses Chapter 11 Trends at Bankruptcy Conference

Situations Partner Kai Zeng in London Kai Zeng, who advises on cross-border restructurings and special situations matters, has joined the firm in London as a partner in the Restructuring Department and Finance and Hybrid Capital & Special Situations groups.

Kai advises sponsors, debtors, creditors and strategic investors on restructurings of stressed and distressed businesses, as well as hedge and credit funds, investments banks and private equity firms on their review and diligence of European investment opportunities in par, stressed and distressed transactions.

In Bolwell & Anor v NWC Finance Pty Ltd & Ors [2024] VSC 30, the Supreme Court of Victoria clarified that a lawyer will not be a "controller" of property within the meaning of section 9 of the Corporations Act 2001 (Cth) (the Act) simply because it was retained to act for a mortgagee exercising their power of sale.

This judgment provides comfort to lawyers as it confirms that they will not assume the obligations of a "controller" under the Act solely by reason of them acting in connection with the sale of real property in an insolvency context.

The England and Wales Court of Appeal recently handed down its first judgment relating to a restructuring plan under Part 26A of the UK Companies Act 2006: Re AGPS Bondco Plc [2024] EWCA Civ 24. Restructuring plans were a 2020 innovation in UK insolvency law, as described in our earlier alert.

On 19 July 2023, the parliament of the Grand Duchy of Luxembourg (Luxembourg) passed bill no. 6539A into law (the New Insolvency Law), marking a significant milestone in the movement to modernise and enhance the competitiveness of Luxembourg’s insolvency framework. The bill has been under discussion for a number of years and aims to curtail the use of bankruptcy as an insolvency solution in favour of the preemptive preservation or reorganisation of financially distressed companies.

After a 10-month inquiry process, on 12 July 2023 the Parliamentary Joint Committee on Corporations and Financial Services (PJC) delivered its final report on the effectiveness of Australia’s corporate insolvency laws.

In this alert, we distil some of the key findings from the almost 400-page report and consider what future law reforms might look like.

A COMPLEX AND INEFFICIENT SYSTEM

The High Court of Australia in Metal Manufactures Pty Limited v Morton [2023] HCA 1 has confirmed the view of the Full Court of the Federal Court of Australia that the "set off" defence under section 553C of the Corporations Act 2001 (Cth) (Act) is no longer available to claims by liquidators for an unfair preference claim made under section 588FA of the Act.

This decision brings finality to claims brought by Creditor Defendants to such claims and no doubt brings much joy to liquidators across Australia.