The long-awaited new Luxembourg law on business preservation and modernisation of bankruptcy law voted by the Luxembourg Parliament on 19 July 2023 (the Law) implementing EU Directive 2019/1023 of 20 June 2019 contains a range of new preventive reorganisation procedures, notably (i) conservatory measures (appointment of a conciliator), (ii) an out-of-court reorganization procedure by mutual agreement (réorganisation par accord amiable) and (iii) judicial reorganisation proceedings (JRP).
There are few things as daunting to a vendor or supplier as its counterparty’s bankruptcy. The likelihood of a significantly discounted recovery for goods and services provided and potential loss of a customer may have long-lasted impacts on profitability. Even worse, however, is the prospect that payments received in good faith prior to a debtor’s bankruptcy filing may be at risk of recoupment. In this alert, we address the risk that such payments are voidable as preferential transfers.
If bankruptcy proceedings are commenced against a debtor or if a debtor enters into a court-approved composition agreement with an assignment of all of its assets, transactions executed by the debtor during the last five years are subject to scrutiny.
The purpose of claw back claims is to recover assets extracted from or given away by an insolvent debtor for the benefit of its insolvency estate and ultimately its creditors. Transactions may be subject to claw back actions if:
European leveraged finance transactions (i.e., acquisition financing by fund sponsors of European targets) are often structured through Luxembourg or the Netherlands because those are creditor-friendly jurisdictions for the creation, perfection and enforcement of (certain) security interests. Structuring through Luxembourg or the Netherlands provides a high degree of transaction flexibility compared to other jurisdictions.
All too often, vendors and suppliers are paralyzed by a customer’s bankruptcy filing (that is, if they are even aware of it in a timely manner). The lack of action, or awareness, could wind up costing these creditors valuable recovery. In this alert, we discuss administrative claims under Section 503(b)(9) of the Bankruptcy Code.
After a pause in 2022, there has been much talk of the continuation, or resumption, of a wave of retail bankruptcy cases as we begin 2023. 2022 was highlighted by Revlon’s filing (discussed here: Revlon May Signal Another Wave of Retail Bankruptcies | Retail & Consumer Products Law Observer (retailconsumerproductslaw.com)).
The effects of Brexit have had seismic consequences for all aspects of law, not just in the UK but in Europe more widely. This month we hear from four Loyens & Loeff team members specialising in insolvency and restructuring matters, who take a look at the corporate insolvency fallout for Luxembourg specifically. How have Schemes and restructuring plans been impacted by the UK’s exit from the EU, and what has it meant for enforceability of judgements?
Earlier this month, the SDNY Bankruptcy Court answered one of the gating questions at the center of Celsius Network’s Chapter 11 bankruptcy regarding the ownership of the approximately $4.2 billion in crypto assets.
Chapter 15 of the Bankruptcy Code provides a mechanism for United States cooperation and coordination with insolvency proceedings abroad, often affording foreign debtors wide-ranging relief and expansive rights through the United States Bankruptcy Court system. Not all proceedings in foreign jurisdictions are eligible — in order to be so, a proceeding must constitute a “foreign proceeding” under the Bankruptcy Code.
BlockFi Inc. and eight of its affiliates followed the paths of crypto platforms Voyager, Celsius and FTX by filing for bankruptcy protection. The case, commenced in the District of New Jersey, on November 28, 2022, is off to a fast start. BlockFi filed a plan of reorganization on the first day of its case. The plan proposes a standalone restructuring but allows the company to toggle to a sale of all or substantially all of the company’s assets. The company had its first day hearing in New Jersey on November 29th and expressed an interest in exiting bankruptcy expeditiously.