“… [B]ecause Congress has not clearly abrogated the solvent-debtor exception,” the U.S. Court of Appeals for the Fifth Circuit held that a reorganized solvent debtor had to “pay what it promised now that it is financially capable.” In re Ultra Petroleum Corp., 2022 WL 8025329, *1, (5th Cir. Oct. 14, 2022) (2-1). Moreover, “given [the debtor’s ] solvency, post-petition interest is to be calculated according to the agreed-upon … contractual default rate …,” not the “much lower Federal Judgment Rate …,” held the court. Id.

Germany eases directors' duty to file for insolvency

November 14, 2022

AUTHORS Dr. Wolfram Prusko | Dr. Joachim Glckler | Dr. David Ehmke

With effect as of November 9, 2022, Germany eases directors' duty to file for insolvency. In response to global business uncertainty and the current energy crisis, Germany enacted the Law on the Temporary Adjustment of Restructuring and Insolvency Law Provisions to Mitigate the Impact of Crises (SanInsKG).

The Insolvency and Bankruptcy Code, 2016 was enacted, amongst others, to facilitate timely insolvency resolution. While the Supreme Court has always upheld the sanctity of timelines under the Code for corporate insolvency resolution, it has held the prescribed timelines for actions prior to the commencement of the corporate insolvency process as merely directory. This article explores the impact of such decisions on the proceedings under the Code which already suffer from inordinate delays.

As discussed in previous installments of this White Paper series, the Lummis-Gillibrand Responsible Financial Innovation Act (the “Bill”)¹ proposes a comprehensive statutory and regulatory framework in an effort to bring stability to the digital asset market. One area of proposed change relates to how digital assets and digital asset exchanges would be treated in bankruptcy. If enacted, the Bill would significantly alter the status quo from a bankruptcy perspective

OVERVIEW OF DIGITAL ASSETS IN BANKRUPTCY

As well as the Deka Legal Bake, last week witnessed the publication of the updated ASHE and a further judgment on the subject of jurisdiction, which seems to be a growth area in satellite litigation, perhaps unsurprisingly given the effect of Exit Day.

The landscape of digital assets, blockchain and related technologies is constantly evolving. Each quarter, Ropes & Gray attorneys analyze government enforcement and private litigation actions, rulings, settlements, and other key developments in this space. We distill the flood of industry headlines so that you can identify and manage risk more effectively.

Historically, Guernsey's insolvency law had limited operational provisions (compared to English law) and was largely developed by a bespoke and flexible application of common and customary law principles by the Royal Court. The old regime will now be updated and revised by the Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance 2020 (Ordinance) which was passed on 15 January 2020. Although it does not yet have force of law it is anticipated to become law in the latter part of this year. 

A common yet contentious liability management strategy is an “uptier” transaction, where lenders holding a majority of loans or notes under a financing agreement seek to elevate or “roll-up” the priority of their debt above the previously pari passu debt held by the non-participating minority lenders. In a recent decision in the Boardriders case, the minority lenders defeated a motion to dismiss various claims challenging an uptier transaction.

Introduction

When a company is being wound up or is in judicial management, the Court may – upon the application of the liquidator, the judicial manager, or a creditor – order the production of documents or information relating to the company, as well as the attendance of the company's officers and the people holding the relevant books and records. This facilitates the obtaining of documents or information for the purpose of determining the reasons for the company's demise.  

On November 11, 2022, the world’s second-largest cryptocurrency exchange FTX Trading Ltd. filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 22-11068). The company reports $10 to $50 billion in both assets and liabilities and intends to place an additional, approximately 130 affiliates into bankruptcy.