Conventional wisdom suggests there is no requirement that a debtor be “insolvent” to file a case under Chapter 11 or any other chapter of the Bankruptcy Code. No Code provision explicitly imposes such a requirement. Yet in 2023, several courts addressed the issue, and two courts directed the dismissal of massive Chapter 11 cases imposing what may fairly be characterized as an insolvency requirement.
Picture this: You are wrapping up writing a brief, memorandum of law, motion or the like regarding a complex bankruptcy issue. It is a close call, and you are grasping for additional arguments to make to the judge. Now ask yourself: Have I discussed the relevant burden of proof? If not, now ask yourself: Whose burden is it anyway?
The Eighth Circuit recently ruled that avoidance causes of action are property of the bankruptcy estate under § 541 of the Bankruptcy Code and thus may be sold by the trustee or debtor in possession. Pitman Farms v. ARKK Food Company, LLC, et al., No. 22-2011 (8th Cir. August 21, 2023). The ruling reinforces the notion that estate causes of action are assets that can be sold under § 363 of the Code, a practice which has been increasingly used in § 363 sales.
Theintroduction of Subchapter V in 2020 created a new avenue for small business debtors to more efficiently and effectively obtain relief under Chapter 11 of the Bankruptcy Code.
This morning, after much anticipation, the Supreme Court has released its judgment in Yan v Mainzeal Property Construction Limited (in liq) [2023] NZSC 113, largely upholding the Court of Appeal's decision, and awarding damages of $39.8m against the directors collectively, with specified limits for certain directors. The decision signals that a strong emphasis on 'creditor protection' is now embedded in New Zealand company law.
In 2020, Congress enacted the Small Business Reorganization Act (SBA), which codified Subchapter V within Chapter 11 of the Bankruptcy Code. The newly added subchapter is remarkably powerful, and with the new additions from Congress, creates a streamlined process for small businesses to reorganize. After passing the SBA, Congress subsequently increased the applicable debt limits for businesses eligible for Subchapter V, from approximately $2.7 million to $7.5 million, which qualified many more businesses for Subchapter V relief.
Bankruptcy filings, particularly Chapter 11 bankruptcy reorganization filings, are on a significant rise. Approximately 3,000 commercial Chapter 11 bankruptcy cases were filed in the first six months of 2023, an increase of more than 60 percent over the prior year. These cases include the most prominent bankruptcy filings—often in Delaware, Southern District of Texas or Southern District of New York.
Consensus remains elusive on the two major questions concerning the application of bankruptcy law in mass tort cases. In the past few months, at least five major decisions have addressed the significant issues of the availability of third-party releases and the two-step bankruptcies. Appeals have been filed or are threatened. In the meantime, the authors of a University of Chicago Law Review article argue that, as a matter of public policy, both should be available with court safeguards.
In recent years much ink has been spilled opining on the so called 'Quincecare' duty of care, and the limits of it (see links to our recent insolvency law updates covering the topic below). The judgment in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363 was a first instance decision on Steyn J, in which he found that a bank has a duty not to execute a payment instruction given by an agent of its customer without making inquiries if the bank has reasonable grounds for believing that the agent is attempting to defraud the customer.
简介
最近在Re Guy Kwok-Hung Lam [2023] HKCFA 9一案中，香港终审法院澄清，如果受争议的呈请债务所涉及的协议载有专属司法管辖权条款（「专属条款」），法院应如何处理清盘及破产呈请。
案情
上诉人于2017年与CP Global Inc（「该公司」）及答辩人订立了一份信贷及担保协议（「信贷协议」）。据此，上诉人向该公司提供定期贷款，答辩人就该公司结欠上诉人的所有款项提供个人担保。信贷协议载有专属条款，就该协议所产生或与之有关的所有法律程序赋予纽约法院专属司法管辖权。
于2020年，上诉人认为发生了信贷协议所指的违约事件，故要求答辩人支付信贷协议项下的未偿还本金及利息。答辩人未有按上诉人的要求还款，因此上诉人在香港针对答辩人展开破产法律程序。另一方面，答辩人在纽约提起诉讼，请求法院求宣告并无发生信贷协议下的违约事件。
答辩人反对在香港提出破产呈请的主要理由之一，是专属条款规定上诉人须首先在纽约法院就双方争议进行诉讼，然后才可在香港展开破产程序。