Due to the ongoing financial crisis and the economic downturn accompanied therewith, many German companies are or will be struggling with default and insolvency problems.
New legislation alters the law and procedures of personal insolvency in radical ways. The Personal Insolvency Act 2012 establishes an independent Insolvency Service of Ireland and introduces new insolvency procedures for addressing unsecured debts (of any value) and secured debts (up to €3 million in aggregate but without limit in the case of agreement). Current bankruptcy laws are amended, including a reduction of the bankruptcy term from 12 years to 3 and the carve-out of pension assets from the bankrupt’s estate.
Draft legislation proposes to alter the law and procedures of personal insolvency in radical ways. The proposals include the establishment of an independent Insolvency Service of Ireland and the introduction of new procedures for addressing unsecured debts (of any value) and secured debts (up to €3 million in aggregate but without limit in the case of agreement). Current bankruptcy laws would also be amended, principally to increase the minimum level of debt required to enter bankruptcy to €20,000 and to reduce the bankruptcy term from 12 years to three.
For debtors with limited liabilities, little surplus income and minimal gross assets, the new Debt Relief Order (DRO) is a further tool to consider in managing their debts. DROs, which came into force on 6 April 2009, are aimed at those who find they are unable to pay off their debts within a reasonable time but for whom other forms of debt relief, such as bankruptcy or Individual Voluntary Arrangements, are unavailable, or perhaps unaffordable.
What are the criteria for a DRO?
A DRO can be applied for where the debtor:
On August 1, 2019 the U.S. Senate passed the Family Farmer Relief Act of 2019, which more than doubled the debt limit for “family farmers” qualifying for relief under Chapter 12 of the U.S. Bankruptcy Code to $10,000,000. The House of Representatives previously passed the same legislation on July 29, 2019; the legislation will now proceed to the White House for the President’s signature.
On April 12, the FTC and the Florida Attorney General announced an $85 million settlement with three individuals who allegedly sold fake debt relief services.
On May 25, at the request of the FTC and the State of Florida, a Southern District of Florida court issued a preliminary injunction order temporarily halting a debt relief operation that bilked millions of dollars from financially strapped consumers.
The current decline in oil prices, which continues to show no signs of a long-term reversal, is having unexpected and unwanted consequences, many of which may turn into long-lasting troubles for the oil and gas industry, especially for its investors.
The U.S. Supreme Court has handed down two rulings thus far in 2016 (October 2015 Term) involving issues of bankruptcy law. In the first, Husky Int’l Elecs., Inc. v. Ritz, 194 L. Ed. 2d 655, 2016 BL 154812 (2016), the Court addressed the scope of section 523(a)(2)(A) of the Bankruptcy Code, which bars the discharge of any debt of an individual debtor for money, property, services, or credit to the extent obtained by "false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition."
A Chapter 11 debtor’s financial advisers were entitled to a “Success Fee” based on a percentage of a $50-million “debt-to-equity conversion,” held a split U.S. Court of Appeals for the Fifth Circuit on May 4, 2016. In re Valence Technology, Inc., 2016 WL 2587109, *1 (5th Cir. May 4, 2016) (2-1). Key to the opinion was the parties’ concession that the “debt-to-equity conversion qualified as a Private Placement under [their] engagement agreements.” Id., at n.1.