In the March/April 2014 edition of the Business Restructuring Review, we discussed an important ruling from a Delaware bankruptcy court restricting a creditor’s right to credit bid an acquired claim in bankruptcy sale of the underlying collateral. In In re Fisker Automotive Holdings, Inc., 2014 BL 13998 (Bankr. D. Del. Jan. 17, 2014), leave to app. denied, 2014 BL 33749 (D. Del. Feb. 7, 2014), certification denied, 2014 BL 37766 (D. Del. Feb. 12, 2014), the bankruptcy court limited the amount of the credit bid to the discounted purchase price actually paid for the debt.

Global—On 10 January 2014, the US Supreme Court agreed to resolve a court split over the scope of discovery orders aimed at enforcing judgments against foreign states. In Argentina v. NML Capital, Ltd., No. 12-842, 2014 BL 7274 (Jan. 10, 2014), the Supreme Court granted a petition for a writ of certiorari to hear an appeal stemming from Argentina's default on its government debt in 2001. Argentina restructured its defaulted debt in 2005 and 2010.

Unlike in cases filed under other chapters of the Bankruptcy Code, the filing of a petition for recognition of a foreign bankruptcy or insolvency case under chapter 15 does not automatically trigger a stay of actions against a debtor or its U.S. assets. Instead, the automatic stay generally applies only at such time that the U.S.

Recent Developments

The financial crisis following the collapse of Lehman Brothers and the subsequent sluggish European economy have thrown a spotlight on European Union (“EU”) state aid rules and, in particular, the circumstances under which governments can and will intervene to support a firm in difficulty. This article looks beyond the banking sector and provides an overview of the rules governing state aid to all other firms in difficulty.

State Aid—The Basics

Recent Developments

Indentures often contain make-whole premiums payable upon early redemption of the debt, and term B loan agreements often include "soft call" protection in the form of prepayment premiums during the early life of the loan. If the debt issuer becomes subject to a chapter 11 proceeding after the debt issuance, the question then arises as to how this payment obligation is to be treated: Does the make-whole or prepayment premium constitute unmatured interest due as a result of the debt acceleration, which would be disallowed, or is it liquidated damages?

Highly anticipated changes to Rule 2019 of the Federal Rules of Bankruptcy Procedure became effective on December 1, 2011. Rule 2019 mandates certain disclosures concerning the economic interests of creditors and interest holders in bankruptcy cases. Whether these disclosure requirements apply to ad hoc, or informal, creditor groups has been the subject of vigorous dispute in the bankruptcy courts during the last four years, with courts lining up on both sides of the divide in roughly equal numbers.

In a ruling that has been described as “very important” and the “first decision of its kind,” bankruptcy judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York held on April 1, 2011, in In re Innkeepers USA Trust, 2011 WL 1206173 (Bankr. S.D.N.Y.

Administrations, including "pre-packs", are not capable of constituting "insolvency proceedings...instituted with a view to the liquidation of the assets of the transferor" within the meaning of Regulation 8(7) of TUPE. Where there is a sale of an undertaking by an administrator, the employees assigned to the undertaking will automatically transfer to the buyer and receive unfair dismissal protection.

Key facts