In brief
A selection of newly announced legislation and court decisions reinterpreting private law.
Draft law on preventive restructuring
In response to the proposal by the EU Commission on 7 December 2022 that an EU Directive be issued to harmonise certain aspects of insolvency law, this article provides a look into one of the main topics of the draft directive – pre-pack reorganisation proceedings as regulated in Serbia, Montenegro, and Bosnia and Herzegovina, which are candidate countries for accession to the EU.
In response to the proposal by the EU Commission on 7 December 2022 that an EU Directive be issued to harmonise certain aspects of insolvency law, this article provides a look into one of the main topics of the draft directive – pre-pack reorganisation proceedings as regulated in Serbia, Montenegro, and Bosnia and Herzegovina, which are candidate countries for accession to the EU.
On 7 December 2022, the European Commission published a proposal for a Directive of the European Parliament and of the Council harmonising certain aspects of the insolvency law. The intention of this Directive Proposal is to make insolvency proceedings more predictable and efficient within the EU.
Most importantly, the Directive Proposal introduces a mandatory inclusion of a new restructuring instrument to Slovenian insolvency law: what is known as a ‘pre-pack proceeding’, which is a fast-track liquidation proceeding that:
One of the benefits the US Bankruptcy Code offers debtors is the ability to assign freely contracts under which the debtor has ongoing performance obligations, even if the underlying contract contains a restriction or prohibition against such assignment. Section 365 of the Bankruptcy Code has its limits and does impose certain conditions to such assignment, such as the curing of defaults under the contract (other than so-called “ipso facto” defaults) and the requirement that the assignee be capable of future performance under the contract.
On June 27, 2023, the Official Committee of Unsecured Creditors (the “Committee”) in the BlockFi Chapter 11 bankruptcy reorganization case filed an Objection to the company’s Plan and essentially requested that the company be liquidated. The Official Committee is made up largely of 600,000 individual customers of BlockFi.
BlockFi is a wealth management and trading firm for cryptocurrency holders that first commenced operations in 2017. In July 2021, we wrote about BlockFi’s bumpy road to going public, even though its valuation had just hit $5 billion.
On 7 December 2022, the European Commission published a proposal for a directive for the harmonisation of certain aspects of insolvency laws across EU member states. One of the key elements of this proposal is the introduction of harmonised pre-pack proceedings aimed at increasing the efficiency of business sales in insolvency proceedings.
In brief
In Avanti Communications Ltd [2023] EWHC 940 (Ch), the English court revisited the vexed issue of fixed and floating charges. Notably, it is the first significant case since the landmark decision in Re Spectrum Plus Ltd [2005] UKHL 41 to do so.
The distinction between fixed and floating charges is economically important and affects the recoveries a secured creditor may expect to receive in an insolvent liquidation of the security provider.
Lehman Bros. Int'l (Europe) (In Admin.) v. AG Fin. Prod., Inc., No. 653284/2011 (Sup. Ct. N.Y. County May 17, 2023) [click for opinion]