There have been many reported cases in the bankruptcies of Mr and Mrs Brake (the “Brakes”) including the recent case of Patley Wood Farm LLP v Kicks [2023] EWCA Civ 901 where the Court of Appeal considered an application under s303 of the Insolvency Act 1986 (the “IA 1986”) against a decision of the trustees in bankruptcy of the Brakes (the “Trustees”).
The Supreme Court’s judgment in BTI 2014 LLC v Sequana SA and ors[1] (“Sequana”) is a key decision on the law surrounding directors’ duties.
The High Court was required to consider the Supreme Court’s Sequana judgment in Hunt v Singh (below).
What did we learn from Sequana?
I’m reading a U.S. circuit court’s recent bankruptcy opinion that cites Stern v. Marshall, 564 U.S. 462 (2011). I’m startled by that and blurt out (to myself), “Who cites Stern anymore?!” and “Is Stern still a thing?!” and “I thought Stern has been narrowed to nearly nothing?!”
What creditor would ever want to be an involuntary bankruptcy petitioner under these statements of facts and law:
Why calculating potential claims under s214 Insolvency Act 1986 can be far from simple
Introduction
Oral arguments at the U.S. Supreme Court in Harrington v. Purdue Pharma L.P. happened on December 4, 2023. Here is a link to the official transcript of such arguments.
My Impression
I’ve read that transcript—and still don’t know what the Court is going to do.
But based on the comments/questions of the justices (which are summarized and compiled below), I do have one impression:
Desperate people do desperate things. And desperation leads even good people astray.
So it is in the world of financial stress. Desperate people do desperate things: like providing sloppy financial statements to creditors, failing to assure that all collateral proceeds go to the proper place, and fudging on the truth here-and-there.
We hear a lot these days about bankruptcy venue abuse via corporate-entity manipulation shortly before bankruptcy filing.
Here’s the latest opinion on that subject—which allows Debtor’s choice of venue to stand, based on a newly-created entity:
Is an involuntary bankruptcy, filed by an owner/creditor of the Debtor, filed in good faith or in bad faith?
That’s the question before the U.S. Supreme Court on which it denied certiorari on October 30, 2023 (Wortley v. Juranitch, Case No. 23-211).
Here’s the gist of the case.
The U.S. Trustee is on a crusade to eradicate every type of third-party release from all Chapter 11 bankruptcy plans—no matter what the facts or circumstances might be.
It’s a policy based on the idea that, if the Bankruptcy Code doesn’t specifically and explicitly authorize something, then that something cannot be done . . . ever . . . under any circumstances . . . no matter what . . . period . . . end of story.
We now have another manifestation of that bright-line and unyielding position. Fortunately, the Bankruptcy Court rejects the U.S. Trustee’s objection.