A recent decision by Bankruptcy Judge Stacey Jurnigan in the U.S. Bankruptcy Court for the Northern District of Texas is being touted as the new Farah Manufacturing lender liability opinion for the 2020s.
The Indian distressed assets sector has seen sustained interest from investors due to several legal developments over the past few years. While the outcomes so far have been a mixed bag, a flexible approach and consistent regulatory focus on resolving distressed assets promises to unleash the potential in the sector.
The original version of this article was first published in the Trilegal Quarterly Roundup.
Background
When the validity of an agreed interest rate is the subject of a dispute between the parties to a loan agreement in Germany, the insolvency courts do not have jurisdiction to deal with the dispute. This is something only the civil courts can do.
Impact
If lenders provide sufficient evidence of the loan interest amount, ie usually the loan agreement, the debtor is required to prove that the interest rate contradicts public policy or is unreasonably high.
Introduction
Can the foreclosure of a property tax lien on real estate be avoided as a fraudulent transfer under § 584 of the Bankruptcy Code?
That’s the issue before the District Court, on a bankruptcy appeal, in Duvall v. County of Ontario, New York, Case No. 21-cv-06236 in U.S. District Court, WDNY (issued 11/9/2021).
Courts have gone both ways on the issue.
The Difficulty
On 21 December 2021, the UK government launched the future of insolvency regulation consultation, proposing significant changes to insolvency regulation which it says 'has not kept pace with developments in the insolvency market.'
Recently, the FDIC reported on legal claims and enforcement proceedings taken by the agency during the financial crisis in the years from 2008 to 2013.
The UK government attempted to ease the financial strain of the COVID-19 pandemic with, among other things, rent "holidays" for tenants and the opportunities for loans for certain businesses. While some businesses were able to avail themselves of such measures, not all were eligible or able to utilise such schemes. It seems that commercial landlords have been one of the sectors that have been hit hard, especially with some commercial tenants not surviving the downturn.
On 21 October 2021, the Cayman Islands' legislature gazetted the Companies (Amendment) Bill 2021 (Bill) which introduced a new corporate restructuring process in the Cayman Islands (Cayman). The Bill represents a welcome development to the restructuring regime in the Cayman Islands and once again fortifies the Cayman Islands' standing reputation as a leading offshore financial hub and a popular destination for foreign investment opportunities.
On February 3, 2022, Tracer Roofing of Humble, TX filed a petitionfor relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of Texas (Case No. 22-30314). The petition indicates that the debtor intends to proceed under Subchapter V of Chapter 11. Tracer Roofing reports $500,000 to $1 million in assets and $10 million to $50 million in liabilities.