In the latest decision arising out of long-running disputes over confirmation of the Tribune Company’s Chapter 11 plan, the Third Circuit issued important new guidance concerning the enforceability of subordination agreements in cramdown plans, holding (1) that subordination agreements “need not be strictly enforced” in such plans, and (2) that the relevant comparison, for determining unfair discrimination, need not always be a comparison between the recovery of the preferred class and the dissenting class, but may sometimes entail a comparison between the dissenting class’s desired and act
The different types of insolvency
When a corporate tenant becomes insolvent, the landlord's rights depend upon the type of insolvency administration to which the tenant is subjected. Being familiar with the different options and the ways in which they are administered will enable property owners to act early and put themselves in the best possible position when faced with an insolvent (or potentially insolvent) tenant.
The three most common forms of insolvency administration which may affect corporate tenants are discussed below.
In a July 12, 2007 post, we reported on issues relating to HIH Casualty and General Insurance Limited (“HIH”). The question before the court was whether it had jurisdiction to entertain a request under the Insolvency Act for directions to the liquidators in England to transfer assets collected by them to the liquidators in an Australian liquidation. The Court of Appeal held that it would not direct a transfer of the English assets by the English provisional liquidators to the Australian liquidators because to do so would prejudice the interests of many of the creditors.
On 9 February 2009, the Act of 31 January 2009 on the continuity of companies (Loi relative à la continuité des entreprises/Wet betreffende de continuïteit van de ondernemingen, the "Act") was published in the Belgian State Gazette.
The Act – which actually consists of two separate acts for technical reasons - will replace the unsuccessful Act of 17 July 1997 on composition with creditors.
Summary and implications
Almost exactly one year on from the Order* coming into force, many people remain unaware that it is no longer possible to appoint an administrative receiver over an overseas incorporated company.
Lenders and indeed insolvency practitioners should be aware that this is the case even when dealing with qualifying floating charges created before 15 September 2003 but alternative strategies, including administration, may be pursued to the same effect.
Administrative receivership
Um die Insolvenzmasse zu erhöhen, ermöglicht das Insolvenzanfechtungsrecht dem Insolvenzverwalter, unter bestimmten Voraussetzungen auf Werte zuzugreifen, derer sich der Schuldner vor der Stellung des Antrags auf Eröffnung des Insolvenzverfahrens zu Lasten einzelner oder aller Gläubiger entäußert hat. The insolvency challenge rights give the insolvency administrator, under certain prerequisites, access to assets which the debtor disposed of to the detriment of the creditors prior to the filing for insolvency, thus increasing the insolvency estate.
On March 10, 2017, Singapore's Parliament approved the Companies (Amendment) Bill 2017 ("Act") to enhance the country's corporate debt restructuring framework. The Act was assented to by President Tony Tan Keng Yam on March 29, 2017, and became effective after it was published in the Singapore Government Gazette on March 30, 2017.
Recently, in Re AbitibiBowater Inc., the Province of Newfoundland sought a court order granting it access to the electronic data room of Abitibi created for the purpose of dissemination of certain non-public financial and operation information to its counsel, certain creditors, and the Monitor. The Court denied the Province’s application on the basis that it could not prove itself to be a legitimate stakeholder of Abitibi, and on several policy grounds.
In Prest v Petrodel Resources Limited (in Liquidation)(1) the Manx court recently confirmed that where security for costs orders is appropriate, the amount ordered will not always be restricted to a sum representing the extra costs incurred in enforcing an order in the jurisdiction in which the claimant is resident or in which assets are situated.
The Court of Appeal has recently published its decision in the case of Woodcock v Cumbria PCT. This case has attracted a significant amount of attention in the media as the case looks at the extent to which employers can rely on cost considerations to justify discrimination. Although the case does not break new ground, it does show that economic factors can be taken into consideration by employers in some cases.
Background