On July 16, 2014, the Uniform Law Commission (the "Commission") approved a series of amendments to the Uniform Fraudulent Transfer Act (the "UFTA"), which is currently in force in 43 states (all states except Alaska, Kentucky, Louisiana, Maryland, New York, South Carolina, and Virginia).
Sales of assets pursuant to Section 363 of the Bankruptcy Code or pursuant to a plan of reorganization provide a number of benefits to a purchaser, but they also present a number of potential impediments, particularly to purchasers who are not familiar with the bankruptcy sale process.
The Bankruptcy Code dictates the priority of distributions to the holders of allowed secured and unsecured claims in accordance with various statutory priority schemes. However, the Bankruptcy Code also provides that consensual pre-bankruptcy agreements between or among creditors that prioritize the right to receive payments from an obligor will generally be enforced in a bankruptcy case subsequently filed by the obligor.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
A new insolvency law was approved by the Chilean Congress at the end of 2013 and became effective in October 2014. The legislation substantially overhauls Chile's prior insolvency law, particularly with respect to business insolvency cases. It incorporates a number of provisions that permit the reorganization of financially troubled businesses, with a view toward preserving enterprise value and jobs, as well as expediting and enhancing creditor recoveries. The new law represents a marked departure from the previous regime, which was focused on the liquidation of debtors' assets.
Reduced Liquidity—How Will Oil Companies Feel the Pinch?
Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 28 countries that comprise the European Union, as well as the collective viability of eurozone economies. Here we provide a snapshot of some recent developments regarding insolvency, restructuring, and related issues in the EU.
NOTABLE BUSINESS BANKRUPTCY DECISIONS OF 2014
ALLOWANCE/DISALLOWANCE/PRIORITY/DISCHARGE OF CLAIMS
On September 26, 2014, the United Nations Human Rights Council passed a resolution (A/HRC/27/L.26) condemning "vulture funds" like Argentina's holdout bondholders "for the direct negative effect that the debt repayment to those funds, under predatory conditions, has on the capacity of Governments to fulfill their human rights obligations, particularly economic, social and cultural rights and the right to development." Among other things, the resolution expresses concern regarding "the voluntary nature of international debt relief schemes which has created opportunities
In its first bankruptcy decision of 2014 (October Term, 2013), the U.S. Supreme Court held on March 4, 2014, in Law v. Siegel, 134 S. Ct. 1188 (2014), that a bankruptcy court cannot impose a surcharge on exempt property due to a chapter 7 debtor’s misconduct. In reversing a ruling by the Ninth Circuit, Law v. Siegel (In re Law), 2011 BL 148411 (9th Cir. June 6, 2011), cert. granted, 133 S. Ct.