In the current market, investors are increasingly considering their options in relation to the stressed and distressed credits in their portfolios. Whilst mindful of stakeholder relationships, secured lenders may, in some circumstances, wish to consider the "nuclear option": enforcing their share pledge over a holding company of the operating group (ideally, such pledge being over a single company which directly or indirectly holds the entire business - a "single point of enforcement").
In the recent decision of Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] SGCA 10 (dated 27 March 2024), the Singapore Court of Appeal upheld a director’s breach of duty by authorising the payment of a dividend and the repayment of a loan to himself. The decision, considering Sequana, sheds further important light on the directors’ duty to consider or act in the interest of the company’s creditors, coined as “creditor duty”.
The Facts – Briefly Stated
Legal proceedings need to be filed before the end of any relevant limitation period, otherwise they will be time-barred — often irreparably. There are various reasons why a person may delay commencing proceedings – for example, they may be waiting on litigation funding before prosecuting their claim or need more time to gather evidence in order to decide whether to proceed.
1. Introducción
En la edición de este mes de marzo destacamos:
La Sentencia de la Audiencia Provincial de Barcelona de 20 de diciembre de 2023 que considera irrescindible la hipoteca constituida por la concursada a favor de la AEAT incluso cuando lo que se garantiza es la deuda de un tercero, y no la propia.
ICC Judge Greenwood’s judgment in Kendall & Anor v Ball & Anor (Re Sherwood Oak Homes Ltd – Sherwood Oak Holdings Ltd) [2024] EWHC 746 (Ch) arises out of an application by the administrators of Sherwood Oak Homes Ltd and Sherwood Oak Holdings Ltd under para 63 Sch B1 Insolvency Act 1986 and/or s 234 Insolvency Act for a declaration that land forming part of a development site in Mansfield Woodhouse was held on resulting and/or constructive trust for the benefit of Homes or Holdings and an order for its transfer.
Preferences are a common issue in bankruptcy proceedings. A general overview of preferences in bankruptcy can be found here.
The Bankruptcy Code provides several affirmative defenses to assist creditors in mitigating or eliminating their preference exposure. We have previously addressed the new value defense2 and the ordinary course of business defense3. This article will briefly address another common affirmative defense: the contemporaneous exchange defense.
On 4 March 2024, the High Court approved the amended restructuring plan (the Plan) of Project Lietzenburger Straße Holdco S.à.r.L (the Company) a Luxembourg incorporated company part of the German Aggregate Holdings Group, despite refusing to sanction its original plan.
As seen in the recent proliferation of bankruptcy cases seeking a structured dismissal or conversion after a successful sale, debtors constantly seek creative and efficient ways to wind up a case, including through a traditional plan of liquidation. Yet, as discussed below, debtors must ensure that any proposed voting procedures for a plan comply with section 1126 of the Bankruptcy Code, or are at least supported by, or supportable with, prior precedent.
Highlights
Bankruptcy Code Section 502(b)(6) establishes a Statutory Cap on the damages a landlord can claim arising from the termination of a lease in bankruptcy case. Courts have split on how to calculate the Statutory Cap, whether and how to apply letters of credit to reduce the Statutory Cap, and whether the Statutory Cap applies to a landlord’s claims against a lessee’s debtor-guarantor.
On March 26, 2024, the US District Court for the Southern District of New York issued an opinion addressing the foregoing issues: