Wind the clock back a couple of years to (dare I mention it…) the Covid-19 pandemic, and insolvency practitioners were getting mildly giddy about a new development in the form of a standalone moratorium. Slotting in at the forefront of the Insolvency Act 1986 courtesy of the Corporate Insolvency and Governance Act 2020 (CIGA), the moratorium was designed to give companies a breathing space to find a solution to their troubles when insolvency was knocking on their door.
“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.”
Amidst the cost of living crisis, businesses are folding in record numbers, with barely a week passing without news of a big company casualty. Paperchase is the latest retailer to collapse into administration, with the business being snapped up by Tesco for sale in its superstores and 820 jobs reportedly at risk. So how can we identify the businesses that are in the danger zone and could be heading for insolvency?
1. Profit warnings
Johnson & Johnson (“J&J”) has, for a very long time, produced and sold a baby powder product containing talc—a mineral milled into fine powder that includes traces of asbestos.
In recent years, that baby powder product has spawned a torrent of lawsuits alleging that it causes ovarian cancer and mesothelioma.
Currently, over 38,000 ovarian cancer actions and over 400 mesothelioma actions are pending against J&J. Expectations are for thousands more to be filed in decades to come.
The phrase “projected disposable income” is a plan confirmation standard in all reorganization chapters of the Bankruptcy Code for individuals and businesses:
Bankruptcy benefits for individual debtors are a tough sell—always have been. That’s because no one likes bankruptcy—unless they need it.
But relieving people from debts in unfortunate circumstances is essential to our collective way of life in these United States. That’s always been true.
What follows is the third of three installments on some history of bankruptcy laws through the ages, beginning with ancient times—and to the present in these United States.
Bankruptcy Code
Remember the old saying, “Grab what you can get, when you can get it”?
Well . . . that old saying is now the federal law of the land, applying exclusively to bankruptcy laws in Alabama and North Carolina.
Here’s how. Congress imposed bankruptcy fee increases on Chapter 11 debtors in every state and territory of these United States, other than Alabama and North Carolina. As to similar fees in Alabama and North Carolina, the U.S. Supreme Court recently observed:
Bankruptcy benefits for individual debtors are a tough sell—always have been. That’s because no one likes bankruptcy—unless they need it.
But relieving people from debts in unfortunate circumstances is essential to our collective way of life in these United States. That’s always been true.
What follows is the second of three installments on some history of bankruptcy laws through the ages, beginning with ancient times—and to the present in these United States.
Federal Bankruptcy Act of 1841
Bankruptcy benefits for individual debtors are a tough sell—always have been. That’s because no one likes bankruptcy—unless they need it.
But relieving people from debts in unfortunate circumstances is essential to our collective way of life in these United States. That’s always been true.
What follows is the first of three installments on some history of bankruptcy laws through the ages, beginning with ancient times—and to the present in these United States.
Ancient Days