On 25 October 2024, the Dutch Supreme Court ruled in a ground-breaking judgment in Royal IHC that a WHOA plan may change creditors’ and shareholders’ rights but cannot impose more onerous obligations. More specifically, the lenders cannot be compelled to provide new financing or to accept new terms and still provide new funds under previously committed credit facilities (i.e., undrawn commitments).

An involuntary bankruptcy can be a powerful tool in a creditor's arsenal. Involuntary bankruptcies are rarely filed, however, because of the significant risk of liability for the petitioning creditor if the case is dismissed. A creditor considering filing an involuntary bankruptcy must understand the requirements for filing involuntary bankruptcy cases, which are strictly construed and applied, and be mindful of the associated risks.

Tanner De Witt acted for Chan Ho Yin (also known as Michael Chan) of Kroll (HK) Ltd and Elaine Hanrahan, the Joint Liquidators of Bull’s-Eye Limited (in Liquidation) (“BEL”) which was wound up in the BVI on 15 January 2024. BEL is a company connected to Hua Han Health Industry Holdings Limited (formerly listed on Main Board of the HKEx, stock code 587) (“Hua Han”). Michael Chan is also a one of the joint and several liquidators of Hua Han. BEL held roughly 30% shares in Hua Han and its sole shareholders and directors were the founders of Hua Han.

Should a corporation be affixed with the fraudulent or other nefarious intent of its directing minds? The answer to this question is of key importance in several contexts where the “intent” of the corporation leads to specific legal consequences.

Section 548 of the bankruptcy code authorizes a trustee, debtor, or other appropriate party to avoid actual and constructive fraudulent transfers that occurred prepetition. In order to prove that a transfer was an actual fraudulent transfer, the trustee (or another appropriate plaintiff) must prove that the debtor made the transfer “with actual intent to hinder, delay or defraud any entity to which to debtor was or became…indebted.” 11 U.S.C. §548(a)(1)(A).

Does a Chapter 7 debtor have appellate standing to protect the homestead exemption?

That’s an issue addressed (sort of) in Karamoussayan v Massachusetts Department of Revenue (In re Karamoussayan), Case No. 22-041, First Circuit Bankruptcy Appellate Panel (decided April 11, 2024).

Chronology

Here’s a chronology.

September 9, 2022 — Debtor files a voluntary Chapter 13 petition

In re Main Street Business Funding, LLC, No. 23-2430 (3d Cir. Sept. 5, 2024) (Ambro, J.), the Third Circuit confirmed that an all-assets lien that extends to after-acquired property does not extend to a borrower’s commercial tort claims unless described with sufficient particularity under the Uniform Commercial Code (“UCC”). The court also confirmed that commercial tort claims can constitute proceeds of collateral, but that the commercial tort claims here did not constitute proceeds of the loan at issue in the case.

Background

According to ASIC insolvency data, there were 2,975 building companies that entered external administration in 2023-24, representing some 27% of all insolvencies.

The collapse of Porter Davis on 31 March 2023, left some 1,700 homeowners across Queensland and Victoria having to deal with the fallout.

These are extremely sobering figures. The reality for homeowners is that they are often left dealing with liquidators without many options and faced with substantial losses.

What can you do if you suspect your builder is facing financial difficulty?

On June 27, 2024, the U.S. Supreme Court released its 5-4 opinion in connection with the bankruptcy case of Purdue Pharma L.P. (“Purdue”). Over a vigorous dissent authored by Justice Kavanaugh, a narrow majority of the Supreme Court held that the Bankruptcy Code does not permit chapter 11 plans of reorganization to provide for non-consensual releases of non-debtors outside of the asbestos context.

How to keep your head above water in the face of economic uncertainty, as told by Lucy Trott, Senior Associate, Stevens & Bolton.

Businesses in turmoil dominate the financial press. That depiction of financial distress is supported by monthly figures which make plain that the financial legacy of the Covid-19 pandemic is an increasing number of insolvencies. It is a trend which does not show any sign of abating.