On February 8, 2021, the Congress of the Republic of Guatemala approved the Insolvencies Law. Such Law will imply material and important changes to the legal framework applicable to insolvency and bankruptcy procedures, which will be oriented to benefit the reorganization and continuation of business for debtors that are facing insolvency, so they may comply with their credit obligations without endangering the creditors’ rights. The next step for the Law on Insolvencies’ entry into force, is to obtain the presidential approval and publication by the Executive Branch of government.

Earlier this year, Mexican airline, Grupo Aeromexico, S.A.B. de C.V. (together with its affiliates, the “Debtors”) announced that their creditor body had overwhelmingly voted to approve their proposed Chapter 11 restructuring plan (the “Plan”) save for one class of unsecured creditor claims that voted to reject the Plan. Those claims were held by Invictus Global Management, LLC (“Invictus”), a distressed investment fund that recently purchased the claims subject to a “plan support provision” which purportedly compelled the claimholder to support the Debtors’ Plan.

An “Order Staying the Later-Filed Bankruptcy Cases” is from In re The Aliera Companies Inc., Case No. 21-11548, Delaware Bankruptcy Court (issued January 18, 2022, Doc. 56), followed by an “Order Transferring Venue of the Later-Filed Voluntary Bankruptcy Cases” (issued January 25, 2022, Doc. 67) in the same case.

Introduction:

In a recent judgment, the Supreme Court of India, while keeping up the efforts of plugging various loopholes in Insolvency & Bankruptcy Code, 2016 (“Code”), decided an interesting legal issue relating to the scope of Section 5(20) of the Code, which provides the definition of “operational creditor”.

The Apex Court, in the case of Consolidated Construction Consortium Limited vs. Hitro Energy Solutions Private Limited, was seized of the following legal questions:

The Small Business Reorganization Act of 2019 (SBRA) added subchapter V to chapter 11. In defining the eligibility for subchapter V, Congress amended the Bankruptcy Code’s definition of a “small business debtor” to exclude specifically corporations that are subject to the reporting requirements under the Securities Exchange Act of 1934, essentially making publicly traded companies ineligible for subchapter V.

The Bankruptcy Protector

Procedure

Questions en litige

Est ce qu’une créance relative à un solde de prix de vente d’actions, initialement due par une des deux entités ayant fusionné pour devenir la débitrice, constitue une réclamation relative à des capitaux propres au sens de l’article 2 (1) de la Loi sur la faillite et l’insolvabilité1 (ci après la « LFI ») dans le cadre de la proposition de cette même débitrice?

Le cas échéant, quelles sont les conséquences pour le Vendeur?

Trame factuelle

When a company faces financial distress, concessions are to be made and decisions to be taken in view of its turnaround. In the ordinary course of business, the shareholders bear the entrepreneurial risks and have the ultimate decision-making power. In judicial reorganisation proceedings, the risk and also the decision-making power, is shifted to the creditors as they are the ones having to make the efforts and concessions.

When the availability of bounceback loans was announced, it was heralded as the way for small businesses to quickly and easily access loans of between £2,000 and £50,000 during the COVID pandemic. Undoubtedly, it has helped a significant number of small businesses to weather the storm that COVID brought on many.

There is a common misconception that lender liability is a thing of the past. However, a recent decision provides a warning to lenders that they can be held liable and face substantial damages if they exercise excessive control over a debtor’s business affairs.