Can a corporate debtor be denied a Subchapter V discharge under § 523(a), despite this § 523(a) language (emphasis added):
- “A discharge under section . . . 1192 [Subchapter V] . . . does not discharge an individual debtor from . . . ”?
A recent Bankruptcy Court opinion (in Avion Funding) says, essentially, this: “No! You can’t paint over explicit statutory language.”[Fn. 1]
Such recent opinion:
Miles J’s judgment in Re Sova Capital Ltd [2023] EWHC 452 (Ch) will, like that of Jonathan Hilliard QC in Re Petropavlovsk Plc,be welcomed as a further example of the courts acting to assist insolvency practitioners selling assets in unusual circumstances.
Relief under ss 423-425 Insolvency Act 1986 is not limited to cases of insolvency, as the decision of David Edwards KC, sitting as a High Court judge in the Commercial Court, in Integral Petroleum SA v Petrogat FZE & Ors ([2023] EWHC 44 (Comm)) demonstrates.
Following the important decision in Martlet Homes Ltd v Mulalley & Co Ltd [2022] (see our summary here), LDC (Portfolio One) Ltd v George Downing Construction
The U.S. Supreme Court issues its first-ever opinion—of any type—on August 3, 1791. [Fn. 1] But it does not address a bankruptcy question for quite some time thereafter. In fact, the first U.S. law on the subject of bankruptcy did not exist until the Bankruptcy Act of 1800.
First Bankruptcy Opinion
Here’s a hard-knocks rule:
- When you can’t or won’t explain the true reason for taking a position in negotiations or litigation, distrust and suspicion of the worst-possible motives will follow.
An Exhibit A for this rule is an opinion issued February 9, 2023, in In re Heaven’s Landing, LLC, Case No. 20-21350, Northern Georgia Bankruptcy Court (Doc. 145).
Here are illustrative statements from that opinion:
NGI Systems & Solutions Ltd v The Good Box Co Labs Ltd [2023] EWHC 274 (Ch) records the court’s reasons for sanctioning a restructuring plan made between the defendant company, The Good Box Co Labs Limited, its members, and separate classes of its creditors pursuant to section 901F Companies Act 2006. It also deals with other matters arising out of the company’s administration.
“Consistently, the highest percentage of filings in the federal docket is bankruptcy cases, which can be up to 75% of filings.”
That’s a conclusion by the authors of a 2014 study.[Fn. 1]
Bankruptcy-Specific
Here are bankruptcy-specific details and explanations from that same study:
On January 13, 2023, the U.S. Supreme Court grants the Petition for a writ of certiorari in Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, Supreme Court Case No. 22-227, and on January 31, 2023, the Supreme Court enters this order therein: “Set for Argument on Monday, April 24, 2023.”
Despite the “elegance” of the arguments challenging the calling of creditors’ meetings on behalf of the former CEO, who argued that the rights of “B” shareholders including himself, would be adversely affected, Trower J found that as neither the contractual terms of the rights themselves nor their economic value would be affected by the plans, he would order calling of the meetings under section 901C(3) Companies Act 2006. There was no real change to the economic value for the B shareholders.