The Government intends to enhance the UK's cross-border insolvency regime with the adoption of the UNCITRAL Model Law on Enterprise Group Insolvency (MLEG) and, after further consideration, Article X of the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLIJ).
An appeals court ruled recently that chapter 5 avoidance actions are property of a debtor’s bankruptcy estate that can be sold in section 363 sales. In re Simply Essentials, LLC, No. 22-2011, 2023 U.S. App. LEXIS 21814 (8th Cir. Aug. 21, 2023). The decision follows similar rulings by other appeals courts.
“(b) Duties.—The [Subchapter V] trustee shall— . . . (7)facilitatethe development of a consensual plan of reorganization.”
- From 11 U.S.C § 1183(b)(7)(emphasis added).
Facilitation is, by statute, a duty of every Subchapter V trustee—something a Subchapter V trustee must do. But the nature and boundaries of the facilitation role have always been fuzzy and, therefore, misunderstood.
My purpose in this multi-part series is to provide observations on the facilitation role.
On June 27, 2022, Three Arrows Capital (“3AC”), a crypto hedge fund, commenced liquidation proceedings in the British Virgin Islands and thereafter filed recognition proceedings in, among other countries, the United States and Singapore.
From 1 September 2023, Belgian insolvency law will provide a new discrete preparatory procedure before bankruptcy. It’s aimed at facilitating a value-maximising transfer of assets or activities as a going concern in the interest of creditors and employees.
From 1 September 2023, the Belgian reorganisation procedure by way of a collective plan will be radically changed for large companies. It introduces the obligation to group creditors (and shareholders) into “classes” for the purpose of voting on a restructuring plan.
The Belgian Act of 7 June 2023 transposing EU Restructuring Directive (2019/1023) introduces new rules specifically aimed at large companies filing for a judicial reorganisation through a collective plan (similar to the US Chapter 11 or UK Restructuring Plan procedure).
The Cayman Islands Grand Court recently delivered its judgment in Re Shinsun Holdings (Group) Co., Ltd. FSD 192 of 2022 (DDJ) (21 April 2023) (unreported) (the “Shinsun Judgment”) in which the court determined the ultimate beneficial owner of bonds, held through Euroclear, did not have standing or authority to progress a winding up petition as a contingent creditor. In this article, we explore similar cases in other offshore and common law jurisdictions.
Shinsun Judgment and the Cayman Position
This morning, after much anticipation, the Supreme Court has released its judgment in Yan v Mainzeal Property Construction Limited (in liq) [2023] NZSC 113, largely upholding the Court of Appeal's decision, and awarding damages of $39.8m against the directors collectively, with specified limits for certain directors. The decision signals that a strong emphasis on 'creditor protection' is now embedded in New Zealand company law.
The Supreme Court has brought the Mainzeal saga to an end by holding the directors liable and awarding compensation of $39.8 million (plus 10 years of interest). The outcome effectively endorses the lower courts' criticisms of the directors' conduct and awards a similar amount of compensation to that of the High Court in February 2019.