A recent decision by the United States Bankruptcy Court for the Southern District of Texas in In re Walker County Hospital Corporation serves as an important reminder to clients that are purchasing or renewing directors and officers (“D&O”) insurance coverage that the “Insured versus Insured” exclusion must contain the broadest possible exceptions for claims brought against directors and officers following a bankruptcy filing. Without the specific policy language, current and former directors and officers may be exposed to personal liability.

One common denominator links nearly all stressed businesses: tight liquidity. After the liquidity hole is identified and sized, the discussion inevitably turns to the question of who will fund the necessary capital to extend the liquidity runway. For a PE-backed business where there is a credible path to recovery, a sponsor, due to its existing equity stake, is often willing to inject additional capital into an underperforming portfolio company.

In a much-anticipated decision, the United States Court of Appeals for the Third Circuit recently held that unsecured noteholders’ claims against a debtor for certain “Applicable Premiums” were the “economic equivalent” to unmatured interest and, therefore, not recoverable under section 502(b)(2) of the Bankruptcy Code.

In a recent legal development that underscores the intricate interplay between federal bankruptcy law and the cannabis industry, a court case has emerged involving a bankruptcy filing by an employee of a cannabis company. It’s well established that, because cannabis is generally considered a controlled substance under the federal Controlled Substances Act (CSA), certain cannabis related companies are precluded from obtaining debt relief through bankruptcy. Now individuals employed by cannabis companies might find themselves in the same boat. In Blumsack v. Harrington, 2024 Bankr.

On September 20, 2023, the U.S. Bankruptcy Court for the Central District of California (“Court”) confirmed a plan for a cannabis-related business (“Debtor”) to sell its equity interests in a Canadian cannabis company, Lowell Farms, and distribute the proceeds to its creditors.

Mac Interiors Limited (the Company), a Northern Ireland-incorporated company, has become the first company incorporated outside the Irish State (and the EU) to have an examiner appointed under the examinership regime provided for in section 509 of the Companies Act 2014 (the 2014 Act).

As the cannabis industry matures, there will be winners and losers. Losers lack access to the U.S. Bankruptcy Code. Marijuana related assets cannot be sold free and clear of liens and encumbrances via the tried and true bankruptcy section 363 sale, which leaves the loser’s creditors without the best tool to maximize the value of the loser’s assets, and deprives acquirers of a federal court order conveying assets. What’s the state of play, and what’s the alternative for the losers, their creditors, and the companies that would acquire them?

STATE OF PLAY

Bank Asset Auction: Bids for Silicon Valley Bridge Bank, N.A. (“SVB”) and its subsidiary Silicon Valley Private Bank, together or separately, in whole or in part, are due by Wednesday, March 22, 2023 at 8 p.m. and Friday, March 24, 2023 at 8 p.m. We’ve previously reported that SVB is open for operations for a minimum of ninety days until it is sold or liquidated.

The FDIC has statutory obligations to maximize the net present value return from the sale or disposition of the assets entrusted to it as receiver, and to minimize the amount of any loss realized.[1] Today we examine the FDIC’s efforts to fulfill its mandate through the transfer of assets to bridge-banks, Silicon Valley Bank, N.A. (“SVB”) and Signature Bank, N.A. (“SB”).

The European Union (Preventive Restructuring) Regulations 2021 (the Regulations) were signed into law in Ireland on 27 July 2022. The Regulations provide for the transposition of the mandatory articles of Directive (EU) 2019/1023 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (the Directive).