What have we been up to?
Aside from our collective (but not wholly unexpected) disappointment that the lifting of the remaining Covid restrictions has been pushed back to 19 July, the team continue to advise on a wide range of insolvency related matters, amongst the recent highlights being:
The embargo on evicting or winding up companies who have failed to pay their commercial rent has been in place for a while; was extended from 30 June 2021 and remains in place until 25 March 2022.
The exception was if the creditor could show the failure to pay the rent was not COVID related but the few Court decisions made under the emergency legislation made it clear that the exception was an extremely high hurdle to clear.
In civil litigation, a “final decision” for purposes of appeal is normally limited to an order that resolves the entire case. In general, a ruling cannot be appealed unless it ends the litigation. A bankruptcy case, however, often encompasses many individual controversies. As the United States Supreme Court recently ruled, a bankruptcy court’s order definitively denying a creditor’s request for relief from the automatic stay is a “final decision.” Consequently, the clock on the creditor’s time to appeal starts ticking as soon as the order is entered.
As a matter of practice, chapter 11 plans and confirmation orders routinely discharge administrative expense claims, including those that arise after confirmation of a plan but before its effective date. The Court of Appeals for the Third Circuit (the “Third Circuit”) recently affirmed the bankruptcy court’s statutory authority to do so in Ellis v. Westinghouse Electric Co., LLC, 2021 WL 3852612 (3d Cir. Aug. 30, 2021).
Background
The Corporate Insolvency and Governance Act 2020 (CIGA) came into force on 26 June 2020.
Schedule 10 of CIGA restricted the presentation of debt-related winding-up petitions where a company cannot pay its bills (including rent) due to COVID-19 in Great Britain.
These restrictions were initially due to end on 30 September 2020, but have since been extended until 30 September 2021.
The Current Position
On the 2 August 2021 Treasury released a consultation paper titled ‘Helping Companies Restructure by Improving Schemes of Arrangement. The consultation is aimed at reforming Australia’s scheme of arrangement procedure.
On the heels of this month’s confirmation of Purdue Pharma’s controversial plan of reorganization which contained third-party releases in favor of the Sackler family members, a new bill has been introduced in the Senate seeking an end to what some critics refer to as “bankruptcy forum shopping.” The bill is a companion bill to H.R.
Introduction
In the recent case of Re Grand Peace Group Holdings Ltd [2021] HKCFI 2361, which concerns the winding-up of a foreign incorporated listed company, the Court of First Instance revisited the 2nd core requirement and considered whether the possibility of the court making an order to compel the directors of the company to execute the documents necessary for the liquidators to take control of the company’s BVI subsidiaries would be sufficient to be considered as a real possibility of benefit to the petitioner.
PH Insight for News and Analysis of the Latest Developments from the Courts of England and Wales for August 2021
In this edition. . .
The U.S. Court of Appeals for the Third Circuit recently affirmed lower court rulings that a bankrupt debtor was entitled to receive damages and attorneys’ fees for a creditor’s violation of the automatic stay in bankruptcy.
In so ruling, the Court held that: