One of the fundamental goals of a chapter 11 bankruptcy is the maximization of value available for distribution to creditors. The "absolute priority rule" generally applicable in chapter 11 requires that each class of impaired and unaccepting creditors be paid in full before any junior class of claims or interests may receive distributions under the plan. Courts recognize a limited exception to the absolute priority rule, however, allowing prepetition shareholders to retain their interest in the debtor where they contribute new value toward the debtor's reorganization.
A Cayman Islands scheme of arrangement is a court approved compromise or arrangement between a company and its creditors or shareholders (or classes thereof). A scheme of arrangement is frequently used to implement a financial restructuring by varying or cramming in the rights of the relevant creditors and/or shareholders of a company but may also be used to complete corporate transactions such as a group restructuring or reorganisation, acquisitions, mergers and take-private transactions.
The latest government insolvency statistics highlight that the downturn in the UK economy is still taking a significant toll and the number of UK corporate insolvencies in February 2024 remains high (and 17% higher compared to February 2023).
Latest insolvency statistics
February 2024 saw 2,102 company insolvencies, the highest February figures for at least four years.
A Massachusetts Bankruptcy Court’s recent appellate decision in Blumsack v. Harrington (In re Blumsack) leaves the door open for those employed in the cannabis industry to seek bankruptcy relief where certain conditions are met.
While there is a statutory requirement to register most forms of security granted by limited companies incorporated in the UK at Companies House, it is worth remembering that there is no statutory requirement for the holder of registered security to inform Companies House if, e.g., the debt secured by a registered charge has been satisfied.
Summary
In the first appeal of a restructuring plan under Part 26A Companies Act 2006, the English Court of Appeal unanimously set aside the first instance decision sanctioning the plan proposed by AGPS BondCo PLC, part of the Adler real estate group1.
Established in 2015 as a trusted neutral forum to meet increasing demand for effective transnational dispute resolution, the Singapore International Commercial Court (the "SICC") is a division of the General Division of the High Court and part of the Supreme Court of Singapore. On January 18, 2024, the SICC handed down its first insolvency-related ruling.
General
As a general rule, Law No. 37 of 2004 on Bankruptcy and Delay of Payment (“Law No. 37/2004”) provides that a delay of payment of petition should be granted by the relevant commercial court’s judges if it meets the following requirements:
a. The debtor has two or more creditors; and
b. At least one of the debts is due and payable.
Introduction
Austria implemented Directive (EU) 2019/1023 on preventive restructuring frameworks with the Restructuring Regulation, which came into force on July 17, 2021, and introduced (further) judicial proceedings for preventive restructuring. Practice, however, has shown that the reorganization plan in insolvency proceedings and out-of-court restructuring remain the methods of choice in Austria.