The judgment of Adam Johnson J in Re Great Annual Savings Company Ltd, (Re Companies Act 2006) [2023] EWHC 1141 (Ch) demonstrates again the rigorous approach the courts are taking in relation to the fulfilment of the conditions required to “cram down” dissenting creditors in restructuring plans as well as in the exercise of the court’s discretion to sanction them.
The recent sanction judgment gives important guidance on the way in which the court's discretion should be exercised when sanctioning a restructuring plan and considers whether it is necessary for opposing parties to provide valuation evidence of their own .
Key takeaways from the judgment
No worse off test: expert evidence
Hill Dickinson’s Hong Kong Commercial and Insolvency Disputes team acted for the successful respondent in Guy Kwok-Hung Lam (Respondent) -v- Tor Asia Credit Master Fund LP (Appellant) Final Appeal No.13 of 2022 (on appeal from CACV No. 393 of 2021 [2023] HKCFA 9).
On April 17, 2023, the Fifth Circuit issued an opinion holding that a senior lender who uses economic leverage and exercises its statutory and contractual rights upon a borrower’s default, including the right to credit bid as part of a bankruptcy sale process—despite adverse impact on a junior lender—remains a “good faith” purchaser entitled to the protections under Section 363(m) of the Bankruptcy Code.
Subchapter V of chapter 11 of the United States Bankruptcy Code, which took effect in 2020, has undergone significant developments since its enactment, as courts continue to interpret its provisions, intended to streamline the chapter 11 process for smaller debtors in bankruptcy. Recent data and judicial decisions have given greater context to not only the popularity of Subchapter V, but also its substantive boundaries, with some of these key developments discussed below.
Subchapter V Filings Increase 81% Year-Over-Year in April
The High Court recently issued its ruling in the matter of Re Avanti Communications Limited (in administration). It is the first major case since the pivotal 2005 House of Lords decision of Re Spectrum Plus to examine the characteristics of fixed and floating charges.
Key points
In the last few years, case law has established several important key principles in trust law in the context of insolvent trustees.
It is now well established that:
Lehman Bros. Int'l (Europe) (In Admin.) v. AG Fin. Prod., Inc., No. 653284/2011 (Sup. Ct. N.Y. County May 17, 2023) [click for opinion]
The Facts – Shortly Stated
Hundreds and hundreds of claims for personal injury and property damage associated with PFAS contamination have been accumulating in the courtroom of a Federal Judge in South Carolina. A little over four years ago the Federal Judicial Panel on Multidistrict Litigation determined that Federal claims that Aqueous Film-Forming Foams (AFFF) containing PFAS used to fight fires had contaminated drinking water had enough in common that they should all be sent to Federal Judge Gergel in South Carolina for disposition.