The FTX Group, an international cryptocurrency exchange platform, spectacularly collapsed in November 2022, resulting in FTX Trading Limited and 101 affiliated companies filing for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in Delaware. The Australian arm of the FTX group, FTX Australia Pty Ltd (‘FTX Aust’) and FTX Express Pty Ltd (‘FTX Express’) (collectively the ‘Companies’) was placed into administration in Australia shortly before the Chapter 11 filing.
Changes are afoot to the statutory regime governing special administrations for regulated water companies (the SAR) following the publication of a suite of new legislation.
Impact of the changes on pension trustees
On 7th February 2024, Mr Justice Richards heard closing submissions in the English High Court for a contested sanction hearing for Aggregate Group’s Part 26A restructuring plan. This hearing presented one of the first opportunities to analyse how the Adler decision will affect restructuring plans going forward.
We are happy to present the tenth issue of our e-magazine – Trilegal Quarterly Roundup.
This issue features:
• Intellectual Property Diligences from an Insolvency Lens
• A Roadmap for 100% Biomass-based Energy Solutions
Conventional wisdom suggests there is no requirement that a debtor be “insolvent” to file a case under Chapter 11 or any other chapter of the Bankruptcy Code. No Code provision explicitly imposes such a requirement. Yet in 2023, several courts addressed the issue, and two courts directed the dismissal of massive Chapter 11 cases imposing what may fairly be characterized as an insolvency requirement.
Insolvency matters in Thailand are regulated by the Bankruptcy Act, B.E. 2483 (1940) as amended (the “Bankruptcy Act”). The authoritative body that wields judicial power in these matters is the Central Bankruptcy Court (the “Court”). The core insolvency procedures are: (i) bankruptcy proceedings; and (ii) rehabilitation proceedings. Bankruptcy proceedings are legal procedures overseen by the Court and the official receiver, with a key objective of gathering debtor's assets to be distributed as repayment of debt among the creditors.
The Insolvency and Bankruptcy Code (IBC), introduced in 2016, was conceived as a game-changer, a potent tool to expedite debt recovery from insolvent companies within a stipulated timeframe. Eight years into its existence, the IBC has witnessed a mixed track record. While it has successfully revitalised some companies grappling with financial turmoil, it has also faced criticism. The aim of the IBC was not only to aid the revival of struggling companies, but also to enhance the quality of lenders’ balance sheets and empower distressed asset buyers.
Business Rehabilitation Proceedings in Thailand
Overview of Rehabilitation Proceedings
The primary goal of business rehabilitation proceedings is to provide debtors who are facing insolvency with various mechanisms to address their financial difficulties. This includes restructuring their liabilities and assets while also ensuring that creditors receive repayment equal to or greater than the amount they would have received if the debtor had been declared bankrupt by the court.
New Zealand’s economy, like many others, has been significantly impacted by global events such as the COVID-19 pandemic hangover (inflation, supply chain shocks and high interest rates). These events have led to an increase in distressed M&A activity as healthy companies seek to acquire those in financial distress. Distressed M&A is not without its challenges. The uncertainty of the distressed company’s true value, potential liabilities, and the risk of subsequent insolvency proceedings can deter potential acquirers.
Creditors face many risks when a company files for bankruptcy. One such risk is preference exposure, which is where the company seeks to claw back funds paid to a creditor before the company files for bankruptcy. A general overview of preferences in bankruptcy can be found here.