You’ve gotta admire the Debtor in In re Deirdre Ventura.

Debtor has been fighting to save a Bed and Breakfast business through bankruptcy: beginning in 2018 with a regular Chapter 11, and then struggling to get into Subchapter V.

Debtor’s is a you-can’t-make-this-stuff-up story of persistence through adversity.

Debtor has survived, for example, an inexplicably-bad appellate opinion refusing to allow Debtor’s Subchapter V election. The appellate opinion declares:

Assignment for benefit of creditors (“ABC”) has existed for centuries under the common law of England and the United States. And the ABC process has worked well under that common law!

ABC Function

ABC has been an effective tool in the toolbox of debtor and creditor remedies for resolving financial stress. Specifically, ABC allows a failing business to shut down with efficiently and credibility:

The interrelationship between an assignment for benefit of creditors (“ABC”) proceeding and an involuntary bankruptcy filing, for the same debtor, is governed by various portions of the Bankruptcy Code.

But that relationship remains ill-defined, nonetheless.

What follows is an attempt to summarize a bankruptcy court opinion dealing with that relationship. And here is two of its main conclusions:

On June 21, 2022, Congress and the President (i) extend the $7.5 million debt limit for Subchapter V eligibility, and (ii) adjust other Subchapter V rules.[Fn. 1]

One of the adjustments is this:

“Without these [mediated] settlements, there is no Plan.”

• From Opinion on Plan confirmation, In re Boy Scouts of America, Case No. 20-10343, Delaware Bankruptcy Court, Doc. 10136, at 80 (issued July 29, 2022).

The Boy Scouts of America bankruptcy has achieved a milestone: on July 29, 2022, the Bankruptcy Court issues a 281-page Opinion on confirmation of Debtor’s Plan of Reorganization. The Opinion is generally favorable toward Plan confirmation but identifies a number of issues remaining to be resolved.

“[T]he bankruptcy court— . . . (2) shall excuse compliance . . . if . . . an assignee for the benefit of the debtor’s creditors . . . was appointed or took possession more than 120 days before the date of the filing of the petition, unless . . . necessary to prevent fraud or injustice.”

11 U.S.C. § 543(d)(2) (emphasis added).[Fn. 1]

On August 15, 2022, the Tenth Circuit Court of Appeals reinstates its prior In re Hammons opinion, which deals with remedies for unconstitutionally lower quarterly fees charged to bankruptcy debtors in Alabama and North Carolina.[Fn. 1]

Opinion Points

Check out these points from the Hammons opinion:

Mani Gupta, Aman Choudhary and Saumya Upadhyay, Sarthak Advocates & Solicitors

This is an extract from the 2023 edition of GRR's The Asia-Pacific Restructuring Review. The whole publication is available here.

In summary

Heidi Chui, Stevenson, Wong & Co

This is an extract from the 2023 edition of GRR's The Asia-Pacific Restructuring Review. The whole publication is available here.

In summary

Look Chan Ho, Des Voeux Chambers

This is an extract from the 2023 edition of GRR's The Asia-Pacific Restructuring Review. The whole publication is available here.

Insolvency law, by nature, flourishes in difficult times. Just like last year, restructuring and insolvency activity in 2022 continues to flourish all over the world, together with rapid insolvency law reform.