This article analyses the extent to which dissenting financial creditors are protected under the Indian insolvency regime.

BACKGROUND

Since its inception the Insolvency and Bankruptcy Code, 2016 (Code) has been an evolving legislation with regular updation(s) being brought about in the form of rules and regulations with a view of streamlining the corporate insolvency resolution process (CIRP).

The Judicial Committee of the Privy Council has decisively redrawn the boundaries between arbitration agreements and insolvency proceedings in the case of Sian Participation Corp (In Liquidation) v Halimeda International Ltd.[1]

On June 27, 2024, the United States Supreme Court issued its decision in Harrington v. Purdue Pharma LP, addressing the question of whether a company can use bankruptcy to resolve the liability of non-debtor third parties. The Supreme Court, in a 5-4 decision, held that the bankruptcy code does not authorize a release and an injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge the claims against a nondebtor without the consent of the affected claimants.

The opening of safeguard or reorganisation proceedings does not automatically terminate a current agreement notwithstanding any contractual clause providing for termination.

Termination by a lessor

Background

The administrators of Toogood International Transport and Agricultural Services Ltd (in administration) issued an application seeking an extension of the administration. Their application also asked the court whether consent to a previous administration extension should have been obtained from a secured creditor which had been paid in full before the extension process.

Once a creditor, always a creditor?

The German Federal Court of Justice (Bundesgerichtshof) has clarified the conditions under which incongruent collateral, granted when an insolvency is imminent, can be contested. The burden of proof is placed on the defendant creditor to demonstrate that the action was part of a serious restructuring attempt.

Background

Alice Eaton and Sean Mitchell Discuss Paul, Weiss’s Restructuring

Practice in Vault Q&A

Alice and Sean describe the breadth of Paul, Weiss’s Restructuring

practice and what sets the practice apart in a Q&A in the 2024 edition

of “Practice Perspectives: Vault’s Guide to Legal Practice Areas.”

Elizabeth McColm and Sean Mitchell Publish “USA” Chapter in

ICLG – Restructuring & Insolvency 2024

In the latest ICLG – Restructuring & Insolvency Laws & Regulations,

Elizabeth and Sean discuss common issues in restructurings and

In Mitchell and others v Al Jaber; Al Jaber and others v JJW Ltd [2024] EWCA Civ 423 the Court of Appeal has confirmed that a director remained subject to a continuing fiduciary duty post liquidation when purporting to transfer assets owned by that company, on the basis he was an “intermeddler”. While the case concerned a BVI company, the court’s decision was based on English-law authorities and therefore has wider significance.

Facts

'Avoidance action' is an umbrella term for any proceedings that seek to revoke illegitimate acts that diminish the debtor’s assets. These actions aim to protect creditors and maximise the value recovery from the debtor. Colombian law stipulates a variety of avoidance actions before and during insolvency proceedings, notwithstanding criminal liability for the revoked acts.

Before insolvency proceedings