On June 13, 2016, the U.S. Supreme Court upheld lower court rulings declaring unconstitutional a 2014 Puerto Rico law, portions of which mirrored chapter 9 of the Bankruptcy Code, that would have allowed the commonwealth’s public instrumentalities to restructure a significant portion of Puerto Rico’s bond debt (widely reported to be as much as $72 billion). In Commonwealth v. Franklin Cal. Tax-Free Tr., 2016 BL 187308 (U.S.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
The Republic of Argentina returned to global debt markets after a 15-year absence on April 19, 2016, when it sold $16 billion in bonds to fund a series of landmark settlements reached earlier this year with holdout bondholders from the South American nation’s 2005 and 2010 debt restructurings. This latest development in the more than decade-long battle between Argentina and the holdouts—led by hedge funds Aurelius Capital Master Ltd. (“Aurelius”) and NML Capital Ltd.
On May 16, 2016, the U.S. Supreme Court decided Husky International Electronics, Inc. v. Ritz, No. 15-145, holding that the "actual fraud" bar to discharge under section 523(a)(2)(A) of the Bankruptcy Code encompasses an individual debtor's knowing receipt of fraudulently transferred property.
Statutory Background
Recent Developments
One of the more appealing aspects of the U.S. bankruptcy process is the relative ease in which parties in interest may file proofs of claim. In years passed all it took was to mail in a simple form to the bankruptcy court or claims agent and now it is even easier with the advent of email and electronic claims uploading. This relatively easy process, however, often comes with a plethora of invalid or unenforceable proofs of claim.
When Can a Subsidiary Be Liable for the Actions of Its Owners?
We’ve previously written on various cases in which parties have sought to save or revive late filed pleadings by arguing those pleadings “relate back” to previously filed documents with varying degrees of success.
As we previously reported here at the Weil Bankruptcy Blog, in Burberry Limited and Burberry USA v.
Federal bankruptcy law can benefit debtors and creditors alike. Provisions such as the automatic stay and absolute priority ensure a streamlined proceeding, preserving the debtor’s scarce resources for business rehabilitation and creditor repayment. The alternative, multiple state court debt enforcement actions, would waste the debtor’s time and money on litigation (as valuable as bankruptcy lawyers may be).