June, 2023 For Private Circulation - Educational & Informational Purpose Only A BRIEFING ON LEGAL MATTERS OF CURRENT INTEREST KEY HIGHLIGHTS ⁎ Supreme Court: Secured creditor not categorized as either financial creditor or operational creditor is entitled to retain security interest in pledged shares. * Supreme Court upholds the constitutional validity of Section 140(5) of the Companies Act, 2013, which inter alia imposes statutory bar on the auditor(s) for a period of five years. * NCLAT upholds the insolvency proceedings against Go First.

This might be the most confounding economy in memory, one that refuses to conform to any predictable script or playbook — just ask Fed Chair Powell, who continues the central bank’s yearlong efforts to slow an economy that won’t easily be tamed. But if you mention to someone outside of the restructuring profession that you’re a corporate bankruptcy advisor, the response you are likely to hear is something to the effect of, “Oh, business must be good these days.”

The U.S. Court of Appeals for the Ninth Circuit recently reversed a contrary trial court ruling and joined with the U.S. Court of Appeals for the Tenth Circuit in holding that a Chapter 13 trustee is not entitled to a percentage fee of plan payments as compensation for her work in a Chapter 13 case when the case is dismissed prior to confirmation.

A copy of the opinion in Evans v. McCallister (In re Evans) is available at: Link to Opinion.

The Hong Kong Court of Final Appeal (CFA) has recently in Re Guy Kwok-Hung Lam^[1] confirmed that, where a dispute in respect of a petition debt is subject to an exclusive jurisdiction clause (EJC), the Hong Kong court should gen

The Court of Appeal has set aside a freezing order obtained by a provisional liquidator within winding up proceedings, on the basis that the cross-undertaking in damages given by him was inadequate because it was limited to the amount recovered for the estate. The liquidator had not discharged the burden of showing good reason to depart from the “default position” that a cross-undertaking should be unlimited in amount: Hunt v Ubhi [2023] EWCA Civ 417.

Subchapter V of the Bankruptcy Code’s Chapter 11 is relatively new: it took effect as a new law on February 19, 2020. Accordingly, new questions continue to arise on how its terms and provisions should be applied.

A Trustee Fees Question

One Subchapter V question is this:

• When does a Subchapter V trustee’s administrative claim for fees and costs get paid?

A Regular Chapter 11 Answer

The answer in regular Chapter 11 has always been this:

As we have written here on multiple occasions, the Private Attorneys General Act (PAGA) disadvantages employers in several ways. Despite permitting recovery similar to what might be obtained in a class action, class certification rules do not apply and it is an open question whether courts can even limit an unmanageable claim before trial.

The first half of 2023 witnessed the failure of three financial institutions in quick succession—Silicon Valley Bank (March 10, 2023), Signature Bank (March 12, 2023), and First Republic Bank (May 1, 2023). This was the first time three financial institutions failed in such a compressed time period since the Great Recession of 2008.

Der Anwalt haftet, wenn er seinen Mandanten fälschlicherweise nicht über die Insolvenzreife aufklärt. Allerdings nur, wenn die Prüfung der Insolvenzreife Gegenstand des Beratungsvertrages geworden ist. Den Gegenstand des Beratungsvertrages muss der Mandant darlegen und beweisen. Die Anforderungen an diese Darlegungs- und Beweislast dürfen jedoch nicht überhöht werden, so der BGH in seinem Beschluss vom 26.01.2023 (Az. III ZR 91/22).

This article was first published on India Business Law Journal on 22 June 2023.

In M Suresh Kumar Reddy v Canara Bank and Ors, the Supreme Court clarified that its observations inVidarbha Industries Power Limited v Axis Bank Limited were restricted to the particular facts of that case. Therefore, except in exceptional circumstances, National Company Law Tribunals (NCLT) must admit applications under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), once the existence of a debt and default is established.