In Bolwell & Anor v NWC Finance Pty Ltd & Ors [2024] VSC 30, the Supreme Court of Victoria clarified that a lawyer will not be a "controller" of property within the meaning of section 9 of the Corporations Act 2001 (Cth) (the Act) simply because it was retained to act for a mortgagee exercising their power of sale.
This judgment provides comfort to lawyers as it confirms that they will not assume the obligations of a "controller" under the Act solely by reason of them acting in connection with the sale of real property in an insolvency context.
The England and Wales Court of Appeal recently handed down its first judgment relating to a restructuring plan under Part 26A of the UK Companies Act 2006: Re AGPS Bondco Plc [2024] EWCA Civ 24. Restructuring plans were a 2020 innovation in UK insolvency law, as described in our earlier alert.
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.
On 19 July 2023, the parliament of the Grand Duchy of Luxembourg (Luxembourg) passed bill no. 6539A into law (the New Insolvency Law), marking a significant milestone in the movement to modernise and enhance the competitiveness of Luxembourg’s insolvency framework. The bill has been under discussion for a number of years and aims to curtail the use of bankruptcy as an insolvency solution in favour of the preemptive preservation or reorganisation of financially distressed companies.
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.