Pooling Orders: Use of Property in a Joint Business

Morgan v McMillan Investment Holdings Pty Ltd [2024] HCA 33("McMillan")

"Where two or more related companies have engaged in a common business enterprise and are being wound up in insolvency, it may be appropriate in certain circumstances for the separate entities of the companies to be disregarded so that they are wound up together as if they were the one company." Harmer Report [854]

Our latest briefing compares recent developments in the APAC restructuring market with those in the UK. Despite APAC's and the UK's divergent monetary policy and growth forecasts, we find that restructuring markets in both regions are seeing very similar themes:

Introducción

Dentro de las resoluciones concursales publicadas este verano vuelven a cobrar especial protagonismo las relativas a los planes de restructuración. La ley 16/2022, de 5 de septiembre, que introdujo los planes en nuestro ordenamiento cumple ahora dos años de vigencia y poco a poco se va formando un nutrido cuerpo de doctrina jurisprudencial.

Dicha doctrina comienza a perfilar límites en la flexibilidad total que se predica de los planes. En concreto en esta edición de las píldoras concursales reseñamos dos nuevas resoluciones clave, que son:

What you need to know

Asset freeze measures enacted by the United Kingdom against designated persons (DPs) can, under certain circumstances, extend to entities “owned or controlled” by DPs. To date, there have been few—and at times partly contradictory—English court cases addressing the “ownership and control” criteria under the UK sanctions regime. The latest judgment in Hellard v OJSC Rossiysky Kredit Bank sought to reconcile the previous guidance provided by the courts in the Mints and Litasco cases.

The US Supreme Court ruled in a landmark 5-4 decision on June 27, 2024 that nonconsensual third-party releases, as proposed in Purdue Pharma’s bankruptcy plan, were not permissible under the Bankruptcy Code. A nonconsensual third-party release serves to eliminate the direct claims of third parties against nondebtor parties without soliciting the consent of such affected claimants. This contrasts with consensual releases and opt-in or opt-out mechanisms permitted by courts.

One of the primary goals of bankruptcy law is to provide debtors with a fresh start by imposing an automatic stay and allowing for claims of reorganizing debtors to be discharged. In environmental law, a primary goal is to ensure that the “polluter pays” for environmental harms. These two goals collide when an entity with environmental liabilities enters bankruptcy. The result is often outcomes that are the exception, rather than the rule, with many unsettled areas of law that can be dealt with by bankruptcy courts in varying ways.

Can a debtor reinstate a defaulted loan under a Chapter 11 plan without paying default rate interest? This question was analyzed thoroughly in a recent Southern District of New York Bankruptcy Court decision by Judge Philip Bentley.

In a decision likely to have a knock-on effect for future fraudulent transfer defense and valuation litigation, the Delaware bankruptcy court recently ruled that the price agreed in the sale of an oil and gas company closed by market participants represents the reasonably equivalent value for the assets being sold and is more reliable evidence of value than expert testimony prepared for the purposes of litigation.

In the wake of several high-profile collapses of cryptocurrency exchanges, most notably FTX, Celsius, and Voyager, the state of the digital asset landscape is ever-changing, with more questions and landmines than clear paths forward. Among the many issues that arise in these bankruptcy cases is the question of how to treat and classify digital assets, especially cryptocurrencies—e.g., who owns the cryptocurrencies deposited by customers.