The Insolvency and Bankruptcy Code, 2016 ("the Code" & “IBC”) has been widely acclaimed as a transformative legislative framework in India, representing a significant departure from previous insolvency laws by emphasizing efficient resolution processes and the professionalization of insolvency services.
The much-anticipated BHS judgment is here.
For those without the time to digest all 533 pages immediately, we have summarised the key points below:
Introduction
In the dynamic and rapidly evolving global marketplace, particularly in fast-growing economies like India, there are ever-growing commercial transactions amongst entities within India as also in international transactions amongst entities within India and outside of India.
In Chapter 11 cases, one of a vendor’s best shots at getting paid its pre-petition debt is being designated as a “critical vendor”.
In connection with the Zachry Holdings Chapter 11 case filed in the Southern District of Texas on May 21, 2024, the Bankruptcy Court made disturbing comments regarding treatment of critical vendors.
In a bankruptcy case, a preference action1 is often asserted pursuant to Section 547 of the Bankruptcy Code against a creditor to claw back funds paid to the creditor in the 90 days prior to the bankruptcy. While the most common defenses to a preference action are the ordinary course of business defense2, the new value defense3, and the contemporaneous exchange for new value defense4, there are other defenses that a savvy creditor should consider to reduce or even eliminate preference liability.
Key Issues
In the late 2023, the Indonesia Supreme Court (Mahkamah Agung, or “MA”) issued Circular Letter Number 3 of 2023 on the Implementation of the 2023 Supreme Court Plenary Meeting Resolution as Guidelines for the Implementation of Court Duties (“Circular 3/2023”). Circular 3/2023 provides the Supreme Court’s interpretation on several regulations which specifically focuses on how the court should enforce and implement the regulations, most notably regarding language regulations and bankruptcy.
This author—whose practice is heavily weighted toward representation of official committees in large chapter 11 cases—has previously penned articles relating to questions surrounding the permanency of an official committee.
In a recent judgment1, the High Court determined (contrary to the arguments of the affected secured creditor) that a debenture created a floating charge rather than a fixed charge over certain internet protocol (IP) addresses. Whilst elements of the decision are inevitably fact-specific, some broader lessons and reminders can be taken from the judgment which will be of general relevance to lenders when taking security.
Introduction
On June 6, 2024, the Supreme Court issued its opinion in Truck Insurance Exchange v. Kaiser Gypsum Co., No. 22-1079, conferring broad standing to debtors’ pre-bankruptcy liability insurers to appear and be heard in Chapter 11 bankruptcy proceedings. The ruling eliminates the “insurance neutrality” doctrine that previously constrained the participation of insurers in Chapter 11, greatly expanding insurers’ capacity to influence the reorganization process.
Background: Insurer Standing in Chapter 11 Bankruptcy