On December 31, 2024, the United States Court of Appeals for the Fifth Circuit issued its long awaited opinion in the disputes arising from the controversial “uptier” transaction executed by Serta Simmons Bedding, L.L.C. (“Serta”) in 2020 and the confirmation of Serta’s chapter 11 plan by the Southern District of Texas Bankruptcy Court in 2023. The Fifth Circuit reversed former Bankruptcy Judge David Jones’ summary judgment ruling that the 2020 uptier transaction was permissible under Serta’s existing credit agreements.
The Delaware Chancery Court placed Arrowood Indemnity Company in liquidation on November 8, 2023, by a liquidation order. The court found Arrowood to be insolvent by the court, and appointed a receiver to liquidate Arrowood’s assets, evaluate any claims made against Arrowood and evaluate the payment of claims made against it.
Background
In an opinion issued on August 16, 2024 (In re Robertshaw US Holding Corp., Bankr. S.D. Tex., Case No. 24-90052, Docket No.
It is essential to establish first if participating companies are under a control relationship and of the same corporate group
How does an arbitration clause, or an exclusive jurisdiction clause in favour of foreign courts, affect insolvency proceedings?
The effect of an arbitration clause, or an exclusive jurisdiction clause in favour of foreign courts, on insolvency proceedings has been a topic of longstanding debate in the Courts of Hong Kong, England and other common law jurisdictions.
Court awards first security for costs order in respect of a challenge to a restructuring plan.
Key takeaways
The High Court has for the first time awarded security for costs in respect of a challenge to a proposed English restructuring plan.1
How can creditors reduce the risk of a fixed charge being characterised as floating?
The determination as to whether a charge over a valuable asset is fixed or floating can be crucial to a creditor's recovery in an insolvency. To have two cases over the course of little more than a year providing detailed analysis of the nature of fixed and floating charges is indeed a treat. Are there any practical steps creditors can take to reduce the risk of a fixed charge being characterised as floating?
Fluctuating assets?
The U.S. Supreme Court reversed confirmation of Purdue Pharma’s Chapter 11 bankruptcy plan of reorganization on the basis that its non-consensual third-party releases were not permissible. It held that the Bankruptcy Code does not authorize the inclusion of a release in a plan that effectively seeks to discharge claims against a non-debtor without the consent of affected claimants. The decision prohibits an approach to global resolution of mass tort litigations that has been utilized in numerous cases over the last 40 years.
Takeaways
In this alert, we consider the implications from the recent High Court judgment finding two former directors of BHS liable for various heads of wrongdoing, including wrongful trading and "misfeasant trading".
What Directors need to know
Consent of secured creditors with no remaining economic interest is not needed to extend the administration of a company
Osborne Clarke recently advised the administrators in two reported High Court cases which have confirmed that a "secured creditor" under section 248 of the Insolvency Act 1986 should be construed in the present tense, retaining the status of secured creditor only if it is still owed a debt by the company in administration.