In 2021, the German legislator changed the rules of conduct by inserting a further section into the German Insolvency Code (InsO).
Background
Background
The bill implementing the EU Preventive Restructuring Directive – a means of financial relief for entrepreneurs (companies only) – should have originally been enacted and introduced last year. As the bill has not yet been approved by the Chamber of Deputies, the deadline has been moved to July 2022.
What's new?
The new government has amended the original proposal, drafted by its predecessor.
On May 7, 2021, we issued a legal alert regarding third-party releases as part of the plan of reorganization in the Perdue Pharma case. [Purdue Pharma: Is Protection of Third Parties by the Automatic Stay an Oxymoron?] The order confirming that plan was appealed and our subsequent legal alert dated December 21, 2021 discussed the decision by Judge Colleen McMahon of the U.S.
In John Doyle Construction v Erith Contractors, the Court of Appeal has further considered the interrelation of insolvency and adjudication, providing guidance on the circumstances in which an adjudication award might be enforceable by a company in liquidation.
The key takeaways
Jurisdiction
On May 7, 2021, we issued a client alert regarding the Perdue Pharma case and the possibility that the bankruptcy case could include a release of individual non-debtor members of the Sackler family. At that time, a plan which contained terms that would effectively extend the automatic stay protections was confirmed by Judge Robert D. Drain, who presided over the bankruptcy case in the Southern District of New York.
The National Debtors Register (Krajowy Rejestr Zadłużonych “KRZ”) began operating in Poland in July 2021.
The KRZ is a new valuable tool providing, among other things, information on debtors. It is a statewide, public register and can be accessed by any person who has the debtor's PESEL (Polish national identification number) or NIP (Polish taxpayer's identification number) or the file reference number of the debtor's case.
On 1 October, Ordinance 2021-1193 introduced changes to the 'accelerated safeguard' procedure making this the 'preventive restructuring framework' as required by the 2019 Directive.
Certain conditions for the opening of an accelerated safeguard procedure have been retained with some modifications:
On 15 November 2021, the English Court released its reasoned judgment for the sanction of Amicus Finance Plc's (Amicus) restructuring plan.
Background
Amicus, a short term property lender, entered administration in 2018. The administrators proposed a restructuring plan to compromise creditors' claims, exit the administration and ultimately restore the company as a going concern. The company faced imminent liquidation if the plan was not approved. Secured creditor, Crowdstacker, an online peer-to-peer lending platform, opposed the plan.
In a recent judgment on directors’ liability, the Higher Regional Court of Düsseldorf (Oberlandesgericht Düsseldorf) held that startup companies are not deemed to be overindebted if they are receiving adequate finance from their shareholders or third parties.
Background
The High Court recently decided that a prosecution could be brought against an administrator under the Trade Union and Labour Relations (Consolidation) Act (TULRCA) in R (on the application of Palmer) v Northern Derbyshire Magistrates' Court [2021] EWHC 3013.