In brief

On 14 May 2021, the Supreme People's Court of the PRC (SPC) and the Government of the Hong Kong Special Administrative Region (HKSAR)  signed a Record of Meeting setting out a framework to facilitate the mutual recognition of and assistance to insolvency proceedings between Mainland China and Hong Kong ("Arrangement"). The Record of Meeting is supplemented by the SPC's Opinion and the HKSAR Government's Practical Guide, which together provide the "Framework". 

In the days leading up to a Chapter 11 filing, companies seeking bankruptcy protection commonly ask whether they can continue to pay some of their vendors after the bankruptcy case is filed. On the flip side, in the days following a Chapter 11 filing, vendors whose customer recently filed a bankruptcy case have the same question – can we still get paid?

In Re:Malaya Sibuku; Ex P: Kaya Karisma Sdn Bhd [2021] 5 CLJ 403, various submissions were advanced by a judgment debtor (“Debtor”) in an appeal against the Senior Assistant Registrar’s (“SAR”) decision in granting leave to the judgment creditor (“Creditor”) to commence bankruptcy proceedings against the Debtor.

The ability to assume or reject executory contracts is one of the primary tools used by debtors in a Chapter 11 reorganization. Where a debtor has a contract with a third party that is “executory”—meaning that ongoing performance obligations remain for both the debtor and the contract counterparty on the date of the bankruptcy filing—the debtor can choose to either assume or reject the contract under 11 USC § 365.

On June 9, 2021, East Greenwich, R.I.-based jewelry company Alex and Ani, LLC filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware along with several affiliates. The lowest filed case number is 21-10917 (A and A Shareholding, Co., LLC). The company estimates $100 million to $500 million in both assets and liabilities.

Contents

Introduction  

Under Singapore bankruptcy law, when a person is adjudged bankrupt, any disposition of property made by him from the date of the bankruptcy application is void unless the court consents to or ratifies the disposition. However, will the court ratify the disposition of assets made pursuant to an order for division of assets in divorce proceedings, and in what circumstances will it do so? These were the issues considered in the Singapore High Court case of Ong Dan Tze Magdalene v Chee Yoh Chuang & Anor [2021] SGHC 129.

The Bottom Line:

Breaking with the Third Circuit and the Fifth Circuit, on June 28, 2011, the Seventh Circuit held that a debtor's plan of reorganization that provides for the sale of the debtor's assets free and clear of an existing security interest may only be confirmed over the objection of its secured creditor if the plan's sale procedure permits the secured creditor to credit bid its secured debt for the assets being sold. River Road Hotel Partners, LLC v. Amalgamated Bank, -- F.3d --, Nos. 10-3597 & 10-3598 (7th Cir. June 28, 2011).

On June 14, 2011, the Pension Benefit Guaranty Corporation (PBGC) published its final rule on the termination of an underfunded pension plan when the sponsor is in bankruptcy. The final rule is substantially the same as the proposed rule published in 2008. The Pension Protection Act of 2006 (PPA) amended the rules for a single-employer pension plan termination when the contributing sponsor is in bankruptcy.