Facts are stubborn things, but statistics, according to Mark Twain, are pliable. While the author of Tom Sawyer likely wasn’t thinking about the annual UK insolvency statistics, they certainly illustrate his point. The Telegraph uses the 2024 statistics, released Tuesday, to criticise Rachel Reeves, suggesting that an increase in compulsory liquidations in 2024 is a direct result of the October budget. Given that the financial impact of the budget will not be felt directly by businesses until April 2025, this is very much a case of putting the cart before the horse.

Overview: The Fifth Circuit’s highly anticipated decision on December 31, 2024, in the Serta Simmons case has significant implications for borrowers and lenders in financial distress situations. The issue on appeal concerned an uptier transaction, a liability management exercise sometimes referred to as “lender-on-lender violence.” The Fifth Circuit’s opinion addresses the contractual viability of uptier transactions and the enforceability of related indemnities in bankruptcy plans, potentially reshaping the landscape for future financial restructurings.

How to keep your head above water in the face of economic uncertainty, as told by Lucy Trott, Senior Associate, Stevens & Bolton.

Businesses in turmoil dominate the financial press. That depiction of financial distress is supported by monthly figures which make plain that the financial legacy of the Covid-19 pandemic is an increasing number of insolvencies. It is a trend which does not show any sign of abating.

Background

The defining feature of the restructuring plan, which was introduced by the Corporate Insolvency and Governance Act 2020, is the "cross class cram down" ("CCCD") mechanism it introduces as a means of imposing a settlement on recalcitrant creditors.

On September 10, 2024, the U.S. Court of Appeals for the Third Circuit issued its opinion in Wells Fargo Bank, N.A. v. The Hertz Corp. (In re The Hertz Corp.), Case No. 23-1169, 2024 WL 4132132 (3d Cir. Sept.

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.

Whether it's gone completely flat or simply reached its maturity, one thing is abundantly clear: The Minneapolis-St. Paul craft beer industry took a turn for the worst in this past year. Multiple, well-known establishments called it quits, including the Eastlake Craft Brewery and Clutch Brewing. Others, like Fair State Brewing Cooperative, recently filed for bankruptcy to reset their financial liabilities and attempt to survive in the new marketplace. Multiple others teeter on the precipice of financial disaster.

The US Court of Appeals for the Third Circuit on September 10, 2024 issued its anticipated opinion in In re The Hertz Corp., with a majority holding that make-whole premiums constitute unmatured interest disallowed by the US Bankruptcy Code, but also finding that solvent debtors must pay creditors their full claims as dictated by contract, including make-whole and post-petition interest, before distributions can be made to equity.

When the COVID-19 Pandemic incepted, and issues arose as to whether affected policyholders could seek Business Income and Civil Authority coverage from the presence or suspected presence of SARS-CoV-2 and consequent orders of Civil Authority, I thought that the easiest question to answer was whether such policyholders had suffered physical loss or damage (“PLOD”) to their property.

The Majority PLOD Rule Prior to COVID-19

This year was set up for disappointment in restructuring activity, given high levels of Chapter 11 filings and debt defaults in 2023 — especially in 1H23 — as well as the resurgence of leverage credit issuance since late 2023 that has allowed many distressed companies to address near-term debt maturities or liquidity challenges without a formal restructuring event. Restructuring activity in 2024 is almost certain to come up short of last year’s high bar; the only question is by how much.