With judgment No. 10105 of 9 May 2014, the Italian Supreme Court of Cassation ruled that trusts can be recognized inItaly, when the settlor is insolvent, only if they are consistent with the purposes of the procedure.

The Case

With judgment No. 5945 of 11 March 2013, the Italian Supreme Court of Cassation addressed a key issue under EC Regulation No. 1346/2000: the location of the “center of main interests” (COMI) of the company according to factors recognizable by third parties.

The Case

The Court of Milan with a decision on 28 May 2014 addressed some heavily debated legal issues: the Bankruptcy Courtmay authorize the debtor to terminate credit facility agreements when the debtor submitted a pre-filing for concordato preventivo (known as “concordato con riserva”)?

The Case

On Monday, the Supreme Court confirmed¹ that bankruptcy courts may hear “Stern-type” matters (such as tortious interference counterclaims) that relate to bankruptcy proceedings, so long as a district court reviews the bankruptcy court’s proposed findings and renders the final decision. Other questions left in the wake of Stern v. Marshall,² however, remain unanswered and will continue to occupy the attention of parties to bankruptcy matters and courts alike.

BACKGROUND: IN THE WAKE OF STERN V. MARSHALL

A recent appellate decision in the Western District of Washington prohibited hedge fund creditors from voting on a debtor’s chapter 11 plan on the basis that the funds did not qualify as “financial institutions” for purposes of the definition of “Eligible Assignee” under the applicable loan agreement.¹ While this counter-intuitive result seems driven by the specific facts of that case, this decision serves as a useful reminder of the importance of carefully reviewing assignment restrictions when purchasing loans in the secondary market.

The French government has recently published a new regulation (ordonnance n°2014-326 dated March 12, 2014) amending France’s bankruptcy law. Its aim is to facilitate further restructurings of French companies, in particular with respect to pre-insolvency consensual restructurings, and to give creditors a greater say in the restructuring process.

PRE-INSOLVENCY CONSENSUAL RESTRUCTURINGS

The institution of composition with creditors enabling business continuity (Article 186-bis of the Bankruptcy Law) and its impact on the legislative framework of public contracts (on the matter see “Composition with creditors enabling business continuity in public contracts”, June 2013, in www.nctm.it/wp-content/uploads/2013/11/CPCP) have given rise to contrasting applications of case-law, and as matters stand, the institution is often applied in different ways.

Chapter 11 has long been used by companies to obtain relief from legacy tort liabilities. There has been a lingering question, however, as to whether chapter 11 can bar claims by tort litigants who were exposed to a hazardous material or defective product before bankruptcy but do not develop injuries until after the case is over. Some debtors have set up trusts and appointed representatives for so-called “future claimants”: this approach can be effective, but may add months or years to a bankruptcy case along with significant cost, business disruption and litigation.

L’istituto del concordato preventivo con continuità aziendale (art. 186-bis della legge fallimentare) e il suo impatto sul quadro normativo dei contratti pubblici (sul punto cfr. “Concordato preventivo con continuità aziendale nei contratti pubblici”, giugno 2013, in www.nctm.it/wp-content/uploads/2013/11/CPCP) hanno dato origine ad applicazioni di giurisprudenza contrastanti, che portano allo stato attuale ad identificare per esso diverse modalità applicative.

On January 10, 2014, in a closely watched case, Judge George Hodges of the Bankruptcy Court for the Western District of North Carolina ruled that Garlock Sealing Technologies, Inc.