The ability of a trustee or chapter 11 debtor in possession ("DIP") to sell bankruptcy estate assets "free and clear" of liens on the property under section 363(f) of the Bankruptcy Code has long been recognized as one of the most powerful tools for restructuring a debtor’s balance sheet and generating value in bankruptcy.

In 1994, Congress amended the Bankruptcy Code to add section 1123(d), which provides that, if a chapter 11 plan proposes to "cure" a default under a contract, the cure amount must be determined in accordance with the underlying agreement and applicable nonbankruptcy law. Since then, a substantial majority of courts, including the U.S. Court of Appeals for the Eleventh Circuit, have held that such a cure amount must include any default-rate interest required under either the contract or applicable nonbankruptcy law. See, e.g., JPMCC 2006-LDP7 Miami Beach Lodging, LLC v.

WHITE PAPER A Multifaceted Maze: The FCA’s Role and Powers in Distressed Situations The last five years have seen a substantial increase in the number and variety of regulated firms operating in the United Kingdom, with the development in particular of financial services provided by new technology firms, asset managers, challenger banks, payment providers and e-money issuers. At the same time, an increasing number of UK Financial Conduct Authority (“FCA”) regulated firms have entered into insolvency proceedings.

In Midland Funding, LLC v. Johnson, No. 16-348, 2017 BL 161314 (U.S. May 15, 2017), the U.S. Supreme Court ruled that a credit collection agency does not violate the Fair Debt Collection Practices Act ("FDCPA") when it files a claim in a bankruptcy case to collect on a debt which would be time-barred in another court.

On June 9, 2016, the New York State Court of Appeals, in Ambac Assur. Corp. v. Countrywide Home Loans, 2016 BL 184648 (N.Y. June 9, 2016), reversed a lower court decision, consistent with the overwhelming majority of federal court decisions, that the common interest doctrine under New York law is not limited to communications made in connection with pending or reasonably anticipated litigation.

Italy has fully integrated the European Account Preservation Order into its procedures alongside existing protective tools available to creditors, who can now also request that their debtors' bank accounts in the European Union be frozen directly by the account bank.

On October 18, 2020 Italy adapted its civil procedure rules to incorporate the European Account Preservation Order ("EAPO") (introduced by EU Regulation 655/2014, in force since January 2017 ("the Regulation")) as an additional protective measure in favor of creditors.

The European Commission ("Commission") has released a consultation paper to evaluate the merits of introducing measures to support secondary markets for distressed debt and the development of a new, contractual-based loan security obligation.

Consultation

Key Points

The U.S. Supreme Court recently handed down three rulings potentially impacting bankruptcy cases.

Nunc Pro TuncRelief

In Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, No. 18-921, 2020 WL 871715 (U.S. Feb. 24, 2020), the Court circumscribed the use of nunc pro tunc ("now for then") orders that make relief ordered by a court apply retroactively to an earlier point in time.

In Short

The Situation: Belgium has introduced senior non-preferred notes, a new category of debt securities available to banking institutions.

The Result: In the event of a liquidation, senior non-preferred notes will rank ahead of subordinated notes, but behind "ordinary" senior preferred notes and any claims benefiting from legal or statutory preferences.