The automatic stay is one of the most fundamental bankruptcy protections. It enjoins the initiation or continuance of any action by any creditor against the debtor or the debtor’s property, including causes of action possessed by the debtor at time of the bankruptcy filing. The automatic stay offers this protection while bringing all of the debtor’s assets and creditors into the same forum, the bankruptcy court.
Introduction
The recent decision in the case of In re Erickson Retirement Communities, LLC, 425 B.R. 309 (Bankr. N.D. Tex. 2010) provides ammunition for those opposing the appointment of an examiner in a debtor’s Chapter 11 case and a cautionary tale for lenders entering into subordination agreements.
The Court of Appeals for the Fifth Circuit recently held that Chapter 15 of the Bankruptcy Code does not prohibit a foreign representative from bringing an avoidance action so long as the claim for relief is based on the substantive laws of the jurisdiction where the foreign proceeding is located. The Fifth Circuit’s decision is consistent with the dual policy considerations of comity and predictability. Fogerty v. Petroquest Res., Inc. (In re Condor Ins. Ltd.), 601 F.3d 319 (5th Cir. 2010).
Background
Introduction
Introduction
The credit crisis has led to many opportunities for financial and strategic buyers to purchase all or part of a business or assets from financially troubled companies at significantly discounted prices. In such deals, buyers run the risk that the transaction may be set aside on the basis of voidable preference rules (the so-called 'actio pauliana').
On September 23 2009 the Amsterdam District Court granted the holder of a pledge over the shares in the capital of Schoeller Arca Systems Services BV authorization for foreclosure on the pledge by way of a private sale. Foreclosure on a pledge over Dutch shares is rare. The decision introduces the possibility for a secured lender either to wipe out subordinated mezzanine debt or to implement a loan-to-own strategy.
Facts
In 2007 Schoeller Arca Systems, its parent and subsidiaries (known as the SAS Group) entered into:
Introduction
As discussed in our previous update, the Business Continuity Act of 31 January 2009 (the “Act”) provides for various options to facilitate business recovery. One such option is the court-supervised sale of (all or part of) the debtor’s business.
The introduction of the court-supervised sale is an important development. Such sales are likely to become a popular option under the Act for two reasons.
The Business Continuity Act of 31 January 2009 (the "Act") creates a variety of flexible tools to promote business recovery. This update focuses on the new judicial (i.e., court-supervised) reorganisation proceedings (as opposed to out-of-court workouts and court-supervised sales of the business).
Simplified access to proceedings