The English High Court has exercised its cram down power and sanctioned the Part 26A restructuring plans proposed by four of Cineworld’s UK operating companies, in face of significant opposition from its landlord creditors, including a novel injunction application by two landlords to exclude their leases from the plans. In sanctioning the plan, Cineworld’s UK Group avoided administration at the end of September.

New Amendment to the Israeli Insolvency Law – grant of the option for a stay of proceedings against a corporation for the purpose of approving a debt arrangement without the appointment of an external officeholder to replace the company’s management

On 4 March 2021, an amendment to the Israeli Insolvency and Rehabilitation Law (Amendment number 4 – Temporary Provisions – the New Coronavirus) 2021 (“Temporary Provisions”) was published. This Temporary Provisions will become effective on 18 March 2021.

The surprising emergence of COVID-19 in 2020 has caught many companies by a complete surprise. Boards of directors of companies, of every size and from each industry, who have just recently approved their budget for 2020, have fallen into a new reality – suspension and, occasionally, complete stop, of business activity. The economic effect of the deadly virus is yet to be fully realized, however it is safe to assume that many companies and business entities who suffer liquidity issues during the crisis, may face insolvency or quasi-insolvency proceedings.

Client Update

The Insolvency and Rehabilitation Law, 2018

On March 5, 2018 the Israeli parliament passed the Insolvency and Rehabilitation Law, 2018 (the "Law"). The Law establishes, for the first time, a modern and consolidated set of insolvency laws for individuals and corporations in Israel. In addition to the codification and consolidation of existing insolvency and rehabilitation rules from multiple sources, the Law makes a number of changes to these existing rules in Israel.

Set out below are some of the key elements of this important new Law.

Frequently a debtor’s assets are sold out of bankruptcy “free and clear” of liens and claims under §363(f).  While the Bankruptcy Code imposes limits on this ability to sell assets, it does allow the sale free and clear if “such interest is in bona fide dispute” or if the price is high enough or the holder of the adverse interest “could be compelled ... to accept a money satisfaction of such interest” or if nonbankruptcy law permits such sale free and clear of such interest.

On February 5, 2016 the IRS released Chief Counsel Advice Memorandum Number 201606027 (the IRS Memo) concluding that “bad boy guarantees” may cause nonrecourse financing to become, for tax purposes, the sole recourse debt of the guarantor. This can dramatically affect the tax basis and at-risk investment of the borrowing entity’s partners or members. Non-recourse liability generally increases the tax basis and at-risk investment of all parties but recourse liability increases only that of the guarantor.

A long-honored concept in real property, that of “covenants running with the land,” is finding its way into the bankruptcy courts. If a covenant (a promise) runs with the land then it burdens or benefits particular real property and will be binding on the successor owner; if that covenant does not run with the land then it is personal and binds those who promised but does not impose itself on a successor owner.

We are often asked what to do if you have an operating agreement and your operator or one of the other working interest owners files for bankruptcy. The Bankruptcy Code allows the debtor to assume or reject the JOA (it is usually an executory contract).

On November 13, 2015, the Federal Deposit Insurance Corporation (FDIC) issued Financial Institution Letter 51-2015 (FIL-51-2015), FDIC Seeking Comment on Frequently Asked Questions Regarding Identifying, Accepting and Reporting Brokered Deposits. FIL-51-2015 seeks comments on the proposed updates to the existing FAQ document on brokered deposits, which was initially released in January of 2015 in FIL-2-2015, after additional comments and questions have been received by the FDIC since the initial issuance.

Under section 363 of the Bankruptcy Code, a debtor is permitted to sell substantially all of its assets outside of a plan of reorganization. Over the past two decades, courts have increasingly liberalized the standards under which 363 sales are approved. A recent decision from the United States Court of Appeals for the Third Circuit,