In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that claim disallowance issues under Section 502(d) of the Bankruptcy Code "travel with" the claim, and not with the claimant. Declining to follow a published district court decision from the same federal district, the bankruptcy court found that section 502(d) applies to disallow a transferred claim regardless of whether the transferee acquired its claim through an assignment or an outright sale. See In re Firestar Diamond, 615 B.R. 161 (Bankr. S.D.N.Y. 2020).

Nearly two years after it was first passed in Parliament on 1 October 2018, the Insolvency, Restructuring and Dissolution Act (“IRDA”) has now come into operation on 30 July 2020. The IRDA not only unifies Singapore’s legislation in relation to personal and corporate insolvency and debt restructuring, but also introduces significant changes to the present regime.

In this update, we will highlight nine key changes of the new provisions of the IRDA.

1. Restriction of Ipso Facto Clauses in Insolvency/Restructuring Proceedings

InIn re Juarez, 603 B.R. 610 (9th Cir. BAP 2019), the Bankruptcy Appellate Panel of the U.S. Court of Appeals for the Ninth Circuit addressed a question of first impression in the circuit with respect to property that is exempt from creditor reach: it adopted the view that, under the "new value exception" to the "absolute priority rule," an individual Chapter 11 debtor intending to retain such property need not make a "new value" contribution covering the value of the exemption.

Background

The new Corporate Insolvency and Governance Bill will introduce new provisions to protect a company from suppliers wishing to terminate supply contracts or invoking more draconian terms when the company is entering into certain insolvency procedures, a CVA, or a new restructuring plan or moratorium (as introduced by the Bill), (each an “Insolvency Procedure”).

The purpose behind the new provisions is to maximise the possibility of a company being rescued or being able to sell its business as a going concern by helping it to trade through an Insolvency Procedure.

The landlord argued that the force majeure clause did not apply at all for three primary reasons. The Bankruptcy Court rejected each of the landlord’s arguments.

Last week the UK government introduced the Corporate Insolvency and Governance Bill in Parliament.

The main objective of the Bill is to provide businesses with the flexibility and space needed to continue to trade during this difficult time caused by the COVID-19 pandemic. That said, the provisions around the new moratorium and the new restructuring plan proposal have been under consideration for a few years.

The Bill’s measures can be split into three categories:

Alerts and Updates

The opinion is significant for a number of reasons, not least of which is that the Bankruptcy Court held that a make-whole premium is not a claim for unmatured interest as the Court of Appeals had intimated.

Alerts and Updates

The rule becomes effective one year after it is published in the Federal Register.

On October 30, 2020, the Consumer Financial Protection Bureau (CFPB) issued a final rule revising Regulation F, 12 CFR part 1006, which implements the federal Fair Debt Collection Practices Act, 15 U.S.C. 1692, et seq. (FDCPA).

In In re Smith, (B.A.P. 10th Cir., Aug. 18, 2020), the U.S. Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Tenth Circuit recently joined the majority of circuit courts of appeals in finding that a creditor seeking a judgment of nondischargeability must demonstrate that the injury caused by the prepetition debtor was both willful and malicious under Section 523(a)(6) of the Bankruptcy Code.

Factual Background

Alerts and Updates

The Third Circuit’s ruling in In re Tribune provides important insight on what it means for a plan to unfairly discriminate.