Restructuring Advisory Director, Luke Wilson, reflects on the manufacturing sector's economic activity.
From my experience every battle in business or life always has two sides, the one which is glaringly obvious, the fight itself – the difficulties and the alarming thoughts of, how do I find a way through – then the other side, beneath the surface, there is an abundance of opportunity for change, growth and learning. This is no different for the current state of flux that the manufacturing sector is facing.
In the October 2023 edition of the Restructuring Department Bulletin, we highlight recent decisions and developments impacting the restructuring arena and share the latest news on the Paul, Weiss Restructuring Department.
The National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT”) has in the case of SVA Family Welfare Trust & Anr v. Ujaas Energy Limited & Ors inter alia held that a resolution plan can contain a clause which extinguishes security interest, such as personal guarantees, after paying compensation to the financial creditor in whose favour such security interest was created.
The recent rise in company insolvencies has been driven by a high number of creditors’ voluntary liquidations (CVL). The outlook for the rest of 2023 is that there will be an even higher number of companies entering a formal insolvency process in almost every sector and industry.
A high proportion of these insolvencies are small businesses (SME’s), some of which had managed to keep going with the help of Government-led support packages and bounce back loans, but with rising interest rates and inflation, they are now struggling to repay loans and obtain financing.
The Eighth Circuit held that “avoidance actions [e.g., preferences, fraudulent transfers] can be sold as property of the [Chapter 7 debtor’s] estate.” In re Simply Essentials, LLC, 2023 WL 5341506, *1 (8th Cir. Aug. 21, 2023). On a direct appeal from the bankruptcy court, the court affirmed the bankruptcy court’s granting of the trustee’s motions to compromise and sell property under Bankruptcy Code §363(f). A creditor had objected, arguing unsuccessfully that “avoidance actions… are not part of the bankruptcy estate ….” Id.
INTRODUCTION
One of the biggest changes brought in by the Insolvency and Bankruptcy Code, 2016 (“Code”) was the demarcation between treatment of interest vis-à-vis financial debt and operational debt. Over time, Courts have interpreted the Code with the aim to strengthen the foundation and resolve uncertainties. One such exercise, which has greatly impacted the insolvency regime, is the inclusion of interest in operational debt.
PHASE 1 – EXCLUSION OF INTEREST
On March 12, 2023 the New York State Department of Financial Services appointed the FDIC as receiver for Signature Bank. The FDIC created a bridge bank, Signature Bridge Bank (“Bridge Bank”), and transferred all deposits and substantially all of Signature Bank’s assets to the Bridge Bank. No consents or other restrictions on transferring rights and obligations of Signature Bank are applicable for the transfer to the Bridge Bank. The receivership is governed by the Federal Deposit Insurance Act (“FDIA”). Under the FDIA, the FDIC succeeds to the rights and powers of Signature Bank.
In the recent case of Uphealth Holdings, Inc. v. Dr. Syed Sabahat Azim, the Calcutta High Court (“CHC”) ruled on the enforceability of moratorium orders from non-reciprocating countries like the United States of America (“US”) in Indian courts.
El Tribunal Supremo, en su sentencia número 513/2024, de 17 de abril (Rec. 2443/2020) ("la Sentencia"), confirma la válida legitimación del recurrente declarado en concurso de acreedores con suspensión de facultades, en tanto la administración concursal omitió el deber de sustituirlo en el procedimiento en trámite.
Introduction