On 17 July 2022, Law 216/2022 came into force amending and supplementing Law No. 85/2014 on insolvency prevention and insolvency proceedings and other normative acts.

Law 216/2022 also amended Romanian Companies Law No. 31/1990 (Romanian Companies Law) on the duties of directors if a company is likely to become insolvent. Also, the law brings derogations from the provisions of the Romanian Companies Law on calling deadlines for shareholders’ meetings in those specific cases when a restructuring agreement or approval of the restructuring plan has been confirmed.

Summary

Restructuring Plans (“Plan(s)”) were introduced by the Corporate Insolvency and Governance Act 2020 (“CIGA”) as a rescue tool for companies in financial difficulty to compromise debt and other liabilities owed to secured and unsecured creditors and its members, with the court’s sanction.

The new Companies House Register of Overseas Entities (the “OE Register”) became operational and key parts of the Economic Crime (Transparency and Enforcement) Act (“ECTEA”) came into force on 1 August 2022.

The land registration elements of ECTEA have been deferred and will come into force on 5 September 2022 – this second stage of implementation will with effect from such date have an immediate impact on the registration of property acquisitions and new leases and security being taken over those acquisitions/leases.

Now that their bankruptcy filing is a few weeks behind us, we provide below an update on certain matters of interest in the case of Celsius Networks and its affiliates. Of course, it’s still very early in the bankruptcy case — and in cryptocurrency cases in general — but we have already heard from many distressed opportunity investors that are interested in identifying investment opportunities. Given the novel legal and difficult valuation issues involved, it will be important to keep a close eye on the developments in these proceedings.

In a matter of first impression relating to an important bankruptcy claims administration issue, Judge Sean H. Lane of the United States Bankruptcy Court for the Southern District of New York, recently denied the ability of a court appointed claims agent to sell and profit from providing direct access to publicly available claims register information. The unsuccessful purchaser of such information was XClaim Inc. (“Xclaim”), a relatively new venture that is seeking to develop a web-based claims trading platform.

The first week of July has brought with it a flurry of activity in the digital asset markets – but not the type of activity that investors in the space likely hoped for.

Summary

The Insolvency Service has released its report on CVAs (the “Report”), which was commissioned in response to the significant concerns raised by the commercial property sector in recent years and the legal challenges launched by landlords against a number of CVAs.

Celsius Networks (“Celsius”) became the latest cryptocurrency platform to raise market temperatures by halting all withdrawals, swaps and transfers from and between its customers’ accounts on June 12, 2022. Celsius touted a next wave of “unbanking,” operating a lending platform allowing the holders of digital assets the opportunity to earn a significantly high returns on those assets.

With the beginnings of the coronavirus pandemic, 2020 brought an onslaught of retail bankruptcy cases. Lord & Taylor, Ascena Brands, Neiman Marcus and JC Penny, among many others – not less than 52 in total. As the economy recovered from the initial shock of the pandemic, the number of retail bankruptcy cases subsided in 2021. According to reports, there were 21 retail cases in 2021 as retail traffic began returning to pre-pandemic levels. 2022, however, brings new pressures on the global economy, and certain that may strike the retail industry with force.

Given the recent media coverage and growing concerns among investors over the risks associated with a bankruptcy filing of a cryptocurrency exchange, it feels timely to highlight some issues that arose in the Chapter 11 cases of Cred Inc. and certain of its affiliates (collectively, “Cred”).