On 31 December 2024, the Fifth Circuit Court of Appeals (the "Federal Court of Appeals") ruled that the uptiering transaction conducted by Serta Simmons Bedding LLC ("Serta") did not constitute an "open market purchase", reversing the 2023 summary judgment of the Bankruptcy Court for the Southern District of Texas (the "Texas Bankruptcy Court") that rejected the excluded lenders' claims for breach of the credit agreement. The Federal Court of Appeals also reversed the approval of certain plan provisions relating to an indemnity for the uptiering transaction.
On July 31, 2024, the Supreme Court of Canada provided clarity regarding the treatment of administrative monetary penalties and disgorgement orders resulting from securities violations in Poonian v. British Columbia (Securities Commission).
As we enter 2025, we look back on five important decisions that made the news in 2024. Here is the the first case.
The perspective of a landlord
In brief
A tenant's insolvency hits landlords particularly hard. Existing rental securities (e.g., rent deposit, landlord's lien) cannot always cushion the loss of rent and operating costs. Especially in times of the current energy crisis and rising costs, this issue is becoming increasingly explosive. This is demonstrated by the numerous insolvencies in the fashion retail sector, such as Galeria, Peek & Cloppenburg, KaDeWe and Esprit. High rents are often of the main reasons for insolvency.
The general rule in bankruptcy is that a debtor receives a “fresh start” and is discharged from prior debts, but this is subject to certain exceptions. Subsection 178(1) of the Bankruptcy and Insolvency Act (BIA) sets out eight classes of debts that are not released by an order of discharge including an exception for debts that arise out of fraud. In Poonian v.
We have blogged previously about the intersection of fraud and bankruptcy.
In Harrington v. Purdue Pharma L.P., 144 S. Ct. 2071 (2024) (“Purdue”), the Supreme Court held that the Bankruptcy Code does not authorize nonconsensual releases of nondebtors as part of a chapter 11 plan. The Court narrowly read the Code’s language, providing that a plan may “include any other appropriate provision not inconsistent with the applicable provisions of this title,” 11 U.S.C.
The Judicial Committee of the Privy Council has decisively redrawn the boundaries between arbitration agreements and insolvency proceedings in the case of Sian Participation Corp (In Liquidation) v Halimeda International Ltd.[1]
Insolvenzanträge von namhaften Projektentwicklern und Immobiliengesellschaften stellen die betroffenen Unternehmen und ihre Gläubiger vor große Herausforderungen und setzen die gesamte Immobilienbranche unter Druck. Gleichzeitig gewinnen alternative Restrukturierungsmethoden, die außerhalb oder bereits im Vorfeld eines formalen Insolvenzverfahrens stattfinden, zunehmend an Bedeutung.
Vor diesem Hintergrund fällt auch vermehrt das Stichwort “StaRUG“, wenn es um die Restrukturierung von immobilienhaltenden Gesellschaften geht.
This article originally appeared in The Bankruptcy Strategist.
To file bankruptcy in the U.S., a debtor must reside in, have a domicile or a place of business in, or have property in the United States. 11 U.S.C. §109(a). In cross border Chapter 15 cases, courts have considered if a foreign debtor must satisfy that jurisdictional test.