On September 18, 2018, the United Nations Commission on International Trade Law ("UNCITRAL") published its final version of the new Model Law on the Recognition and Enforcement of Insolvency-Related Judgments (the "IRJ Model Law"). The IRJ Model Law creates a framework for the recognition and enforcement of judgments in foreign bankruptcy and insolvency proceedings. It is intended to supplement and complement the 1997 UNCITRAL Model Law on Cross-Border Insolvency (the "CBI Model Law").

The ability to avoid fraudulent or preferential transfers is a fundamental part of U.S. bankruptcy law. However, when a transfer by a U.S. entity takes place outside the U.S. to a non-U.S. transferee—as is increasingly common in the global economy—courts disagree as to whether the Bankruptcy Code’s avoidance provisions can apply extraterritorially to avoid the transfer and recover the transferred assets. A ruling recently handed down by the U.S. Bankruptcy Court for the Southern District of New York widens a rift among the courts on this issue. In Spizz v. Goldfarb Seligman & Co.

The watchword for 2016 in much of the world was "upheaval." Two unanticipated events dominated the political, business, and financial headlines of 2016, at least in Europe and the Americas: the Brexit referendum result and the election of Donald J .Trump as the 45th President of the United States. The refugee crisis, the commodities meltdown, Brazil’s economic collapse, China’s growing pains, Russian belligerency and alleged cyber-meddling in the U.S. election, the war on terrorism, and the beginning of the end of the bloody Syrian civil war seemed to pale by comparison.

Global—On August 29, 2014, the International Capital MarketAssociation (“ICMA”), a group of banks and investors,announced a proposal designed to reduce the ability of holdoutbondholders to undermine sovereign debt restructurings. The plan was created after meetings convened by the U.S. Treasury Department in the aftermath of Greece’s debt restructuring and came on the heels of Argentina’s second default on its sovereign debt in 13 years.

For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.

Recent Developments

The world’s second-largest economy (China) stumbled; Japan receded; the U.K. showed signs of life; the war-torn Middle East reeled; oil revenue-dependent Russia, Brazil, and Venezuela took body blows; and the European Union exhaled after narrowly avoiding Grexit (and possibly Brexit), only to confront a refugee crisis of alarming (and expensive) proportions, as well as a demonstrated terrorist threat from the self-proclaimed Islamic State.

A Good Year for the U.S.

Recent Developments

The eyes of the financial world were on the U.S. during 2013. The view was dismaying and encouraging in roughly equal parts. The U.S. rang in the new year with a post-last-minute deal to avoid the Fiscal Cliff that kicked negotiations over "sequestration"—$110 billion in across-the-board cuts to military and domestic spending—two months down the road, but raised income taxes (on the wealthiest Americans) for the first time in two decades. 

The Protection of Wages on Insolvency Fund (the "Fund") was established in 1985 to provide timely relief in the form of an ex gratia payment to eligible employees affected by the insolvency of their employers, for example where employees' severance payments are withheld pending winding-up proceedings. Section 16(2) of the Protection of Wages on Insolvency Ordinance (the "Ordinance") provides that the Commissioner for Labour shall not make payment out of the Fund of amounts exceeding certain caps.

Proposed Swiss International Insolvency Law Reforms

In October 2015, the Swiss Federal Department of Justice and Police (Eidgenössisches Justiz- und Polizeidepartement) published a preliminary draft of reforms to title 11 of the Swiss Private International Law Act (“SPILA”), which governs insolvency proceedings and compensation proceedings (Articles 166–175 rev-SPILA), together with an explanatory report. The consultation procedure for the proposed reforms culminated on February 5, 2016.