Part 1: A Broad Overview of Bankruptcy
‘As privileged professionals, who live by the words of the English language, lawyers have a special duty to be clear in what they say and write’
When discussing any area of law, precision is essential.
A common source of confusion amongst both lawyers and the public generally is the difference between insolvency and bankruptcy. Though you may see the terms being used interchangeably (especially in legal dramas), the two concepts are distinct.
On 10 October, the Dubai Court of First Instance issued a potentially ground-breaking judgment in respect of directors’ liability in the context of corporate insolvency.
In particular, in the matter of the liquidation of the public company Marka PJSC (“Marka”), the Court held the company’s board of directors and managers personally and jointly liable for the company’s outstanding debts, totalling close to AED 450 million.
A Practical Guide to Bankruptcy:
Part 1: A Broad Overview of Bankruptcy
‘As privileged professionals, who live by the words of the English language, lawyers have a special duty to be clear in what they say and write’[1]
When discussing any area of law, precision is essential.
The Bankruptcy Code confers upon debtors or trustees, as the case may be, the power to avoid certain preferential or fraudulent transfers made to creditors within prescribed guidelines and limitations. The U.S. Bankruptcy Court for the District of New Mexico recently addressed the contours of these powers through a recent decision inU.S. Glove v. Jacobs, Adv. No. 21-1009, (Bankr. D.N.M.
The Bankruptcy Protector
While testators generally have freedom to decide how to dispose of their assets in England and Wales, there are limits to this freedom, including where a beneficiary of the estate is made bankrupt. If the testator passes away during the course of the beneficiary’s bankruptcy, the legacy will usually pass to the trustee in bankruptcy for the benefit of creditors instead of to the beneficiary.
Death does not release an individual from their debts and liabilities, nor does it allow transactions made to loved ones to escape challenge. This is so regardless of whether the transactions were made with the intention to defraud creditors.
Insolvency administration orders (IAOs)
In a somewhat unexpected development given his recent appointment to a second 14-year term a mere 5 years ago, Bankruptcy Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York announced that he intends to retire as of June 30, 2022.
The Bankruptcy Protector
Friend or Foe?
On September 1, 2021, Judge Robert Drain issued a much-anticipated oral ruling approving Purdue Pharma L.P.’s plan of reorganization. The plan, which has garnered significant attention from the media, legislators, academics, and practitioners, releases current and future members of the Sackler family and many of their associates and affiliated companies – none of whom filed for bankruptcy themselves – from liability in connection with any possible harm caused by OxyContin and other opioids that Purdue Pharma manufactured and distributed.