Pacific Gas and Electric Company's Chapter 11 filing earlier this year has highlighted an issue that is well settled but sometimes overlooked: Unsecured creditors generally have no right to receive immediate payment of their legal fees from a bankrupt borrower, regardless of any contractual rights they might otherwise have absent the bankruptcy.

As many will know, a failure to “...do all that is reasonable for the purpose of bringing the statutory demand to the debtor’s attention...” may result in an annulment of a bankruptcy order. But how is this requirement of Rule 46 of the Bankruptcy Rules met?

The question of what happens to an international arbitration when a party files for bankruptcy in the United States is arising with increasing frequency. In the United States, the public policy interests that underlie both bankruptcy and arbitration legislation sometimes clash on critical points. The federal courts have developed competing approaches to addressing these issues. This fractured caselaw introduces uncertainty at the intersection of arbitration and bankruptcy.

US Bankruptcy Code

In December 2014 Russia’s Federal Law “On Insolvency (Bankruptcy)” was  significantly amended to introduce bankruptcy of individuals and modify the  rules for bankruptcy of legal entities.  The amendments related to bankruptcy of legal entities came into effect on  29 January 2015.

Need to know

In a first for the US and Australian markets, the Buccaneer Energy group of companies successfully had bankruptcy plans approved by the US Bankruptcy Court for both US and Australian incorporated debtor companies. 

On 18 March 2014, the State Bank of Vietnam (SBV) issued Circular No. 09/2014/TT-NHNN (Circular 09) to amend and supplement a number of articles in Circular No. 02/2013/TT-NHNN regulating the classification of debt, the establishment and levels of risk reserves, and the use of reserves for dealing with risks during the operation of credit institutions and foreign bank branches.

In Re: Katherine Elizabeth Barnet, No. 13-612 (2d Cir. Dec. 11, 2013) [click for opinion]

Enhancing lender priority over pension deficiencies in Canada in the post Indalex era - more guidance from the courts
Three recent cases address open issues from the 2013 Indalex decision and point the way to strategies to limit financier exposure to pension deficiency priority

On September 27, Law 14/2013, on support to the internationalization of business, was approved (Spanish Official Gazette of September 28).  From its entry into force on October 18, the procedure for out-of-court settlement of payments will be implemented, which is a new mechanism of debt renegotiation prior to the declaration of insolvency and an alternative to the so-called “pre-insolvency”, aimed to individual entrepreneurs, freelancers and small and medium-sized businesses that have not yet been declared insolvent whose assets and liabilities meet certain re

On 19 January 2013, a new edition of the Law of Ukraine "On rehabilitation of debtor or its bankruptcy" (the “Bankruptcy Law”) came into force. The Bankruptcy Law provides for the possibility of a pre-bankruptcy rehabilitation of a debtor which may be introduced by the court on the debtor’s or the creditor’s request. During the pre-bankruptcy rehabilitation of the debtor bankruptcy proceedings cannot be commenced in court, and the court may establish a moratorium on the satisfaction of the creditors’ claims.