Standard Profil’s scheme of arrangement was sanctioned by the English High Court on 9 September 2025, notwithstanding a recent Frankfurt court decision casting doubt on whether English restructuring plans and schemes of arrangement proposed by German companies would be capable of sanction by the English courts going forward as a result of recognition issues (see ‘More on this topic’).
When a company is in financial distress, directors face difficult choices. Should they trade on to try to “trade out” of the company’s financial difficulties or should they file for insolvency? If they act too soon, will creditors complain that they should have done more to save the business? A recent English High Court case raises the prospect of directors potentially being held to account for decisions that “merely postpone the inevitable.”
When a company is in financial distress, its directors will face difficult choices. Should they trade on to trade out of the company's financial difficulties or should they file for insolvency? If they delay filing and the company goes into administration or liquidation, will the directors be at risk from a wrongful trading claim by the subsequently appointed liquidator? Once in liquidation, will they be held to have separately breached their duties as directors and face a misfeasance claim? If they file precipitously, will creditors complain they did not do enough to save the business?
Liability management transactions which may favour a subset of creditors over another are increasingly common in the US leveraged finance markets. 2024 may be seen as the year in which these US imports began to make a real impact in Europe. Which strategies could creditors employ to protect themselves from unfavourable treatment where such transactions are attempted?
On June 27, 2024, the United States Supreme Court issued its decision in Harrington v. Purdue Pharma LP, addressing the question of whether a company can use bankruptcy to resolve the liability of non-debtor third parties. The Supreme Court, in a 5-4 decision, held that the bankruptcy code does not authorize a release and an injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge the claims against a nondebtor without the consent of the affected claimants.
On June 27, 2024, the Supreme Court issued its opinion in Harrington v. Purdue Pharma L.P., 603 U.S. ____ (2024) holding that the Bankruptcy Code does not allow for the inclusion of non-consensual third-party releases in chapter 11 plans. This decision settles a long-standing circuit split on the propriety of such releases and clarifies that a plan may not provide for the release of claims against non-debtors without the consent of the claimants.
The securitization or structured finance market has evolved from its early origins focused primarily on financial assets (e.g., mortgages, receivables, loans credit card accounts, etc.) to the world of non-traditional or esoteric securitizations with exciting new assets.
Following an overhaul of the Singapore insolvency regime which came into force on 30 July 2020, the insolvency and restructuring framework was consolidated in the omnibus Insolvency, Restructuring and Dissolution Act 2018 (IRDA). One of the key features of the IRDA was to amend the then-existing construct of statutory avoidance actions in Singapore.
Overview of statutory avoidance provisions following IRDA
The US appears likely to enter a default cycle in the near future, according to senior fund managers and economists. A recent bout of M&A transactions involving chapter 11 cases point in the same direction. Taking deals involving bankruptcy cases as a proxy for distressed M&A, 16 such transactions were announced in the US in Q1, up 14.3 percent year on year, according to Dealogic. The aggregate value of those deals reached US$1.8 billion, a gain of 76 percent from the same period in 2023.
In Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] SGCA 10 (OP3 International)1 the Singapore Court of Appeal considered the trigger for when the director's duty to consider the interests of creditors is engaged (referred to in the judgment as the Creditor Duty).
The Court held that: