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Sell-Side Directors May Be Liable for Breach of Fiduciary Duty Claims for Failing to Investigate Company's Post-Closing Solvency
2020-12-28

In In re Nine West LBO Securities Litigation (Case No. 20-2941) (S.D.N.Y. Dec. 4, 2020), a federal district court denied in part a motion to dismiss claims brought by the Nine West liquidating trustee against former directors (the "Defendants") of The Jones Group, Inc. (the "Company"), Nine West's predecessor, for, among other things, (i) breaches of their fiduciary duties of care and loyalty, and (ii) aiding and abetting breaches of fiduciary duties. The litigation arises from the 2014 LBO of the Company by a private equity sponsor ("Buyer").

Filed under:
USA, Company & Commercial, Insolvency & Restructuring, Litigation, Winston & Strawn LLP, Private equity, Due diligence
Authors:
Dominick DeChiara , Bryan C. Goldstein , Carey D. Schreiber , Bradley C. Vaiana
Location:
USA
Firm:
Winston & Strawn LLP
View Original Article
Directors' Duties Under English Law — How to Lead in Difficult Times
2022-07-01

Elon Musk recently said he has a "super bad feeling" about the economy, pithily declaring what most financial commentators have been predicting in more technical terms.

Filed under:
United Kingdom, Company & Commercial, Insolvency & Restructuring, Litigation, Katten Muchin Rosenman LLP, Coronavirus, UK Supreme Court
Authors:
Sonya Van de Graaff , Prav Reddy , Mark Johnson
Location:
United Kingdom
Firm:
Katten Muchin Rosenman LLP
View Original Article
Bankruptcy Court Rejects US Trustee Fees on Distributions From Trust in 'Paragon Offshore'
2021-09-08

In the recent decision of Paragon Offshore, No. 16-10386 (CSS), 2021 (Bankr. D. Del. June 28, 2021), the U.S. Bankruptcy Court for the District of Delaware (the court) addressed the issue of whether the Office of the United States Trustee (OUST) could collect its quarterly fees against assets that were previously transferred to a litigation trust (the litigation trust) free and clear of any and all claims, liens and other encumbrances pursuant to a confirmed plan of liquidation.

Filed under:
USA, Delaware, Insolvency & Restructuring, Litigation, Duane Morris LLP, Bankruptcy
Authors:
Lawrence J. Kotler
Location:
USA
Firm:
Duane Morris LLP
View Original Article
Unveiling the puzzle: lenders' appeal falls flat as Arrium officers avoid personal liability
2023-05-26

In a recent decision, Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88, lenders to the Arrium Group, a company that collapsed, have lost their appeal regarding the personal liability of the Chief Financial Officer and Group Treasurer. The NSW Supreme Court had previously dismissed the lenders' claims, and the Court of Appeal has now affirmed that decision.

Filed under:
Australia, New South Wales, Insolvency & Restructuring, Litigation, Clayton Utz, Due diligence, New South Wales Supreme Court , New South Wales Court of Appeal
Authors:
Liz Humphry , Tashreen Tourabaly
Location:
Australia
Firm:
Clayton Utz
View Original Article
Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2) [2021] NSWSC 1025
2021-12-21

In the case of Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2) [2021] NSWSC 1025 (Anchorage v Sparkes), the Supreme Court of NSW considered the obligations of company officers to sophisticated commercial lending entities, and whether company officers could be personally liable for making misleading statements.

Significance

Filed under:
Australia, New South Wales, Insolvency & Restructuring, Litigation, Clyde & Co LLP
Authors:
Jacques Jacobs
Location:
Australia
Firm:
Clyde & Co LLP
View Original Article
Opportunities created by The Sbarro's bankruptcy filing
2014-03-18

On Monday, March 10, 2014, the companies that own and operate the Sbarro pizza chain, Sbarro LLC and 33 affiliates, filed for bankruptcy reorganization under Chapter 11 of the federal Bankruptcy Code.  The Sbarro companies operate 217 restaurants in the U.S. and there are 582 franchised restaurants, 176 in the U.S. and 406 at international locations.

Filed under:
USA, Insolvency & Restructuring, Leisure & Tourism, Litigation, Wiley Rein LLP
Authors:
Robert A. Smith , H. Jason Gold , Valerie P. Morrison
Location:
USA
Firm:
Wiley Rein LLP
View Original Article
What does today's Sequana decision mean for directors?
2022-10-05

Background

On 5 October 2022, the Supreme Court handed down its long-awaited judgment in BTI 2014 LLC v. Sequana S.A. [2022] UKSC 25 concerning the trigger point at which directors must have regard to the interests of creditors pursuant to s.172(3) of the Companies Act 2006 (the "creditors' interests duty").

Filed under:
European Union, United Kingdom, Insolvency & Restructuring, Litigation, Public, Dentons, Brexit, Supply chain, Coronavirus, Insolvency, UK Supreme Court
Authors:
Tessa Blank , Neil Griffiths , Luci Mitchell-Fry , Ian Fox , Celia Hayward , Richard Pallot-Cook
Location:
European Union, United Kingdom
Firm:
Dentons
View Original Article
English court considers directors' "creditor duty" in context of failed tax avoidance scheme
2023-09-06

In Hunt v Singh, the Court referred to the Supreme Court's landmark decision in BTI v Sequana (see our alert) in deciding when the directors' duty to creditors arose.

Background

Marylebone Warwick Balfour Management Limited (the Company), entered a tax avoidance scheme between 2002 and 2010 which the directors, on professional advice, believed to be valid.

Filed under:
United Kingdom, Company & Commercial, Insolvency & Restructuring, Litigation, Tax, Taylor Wessing, Tax avoidance, Insolvency
Authors:
Louise Jennings , Isabelle Moisy
Location:
United Kingdom
Firm:
Taylor Wessing
View Original Article
Requirement to substantiate German debtor's illiquidity remains high
2023-09-06

Where a creditor believes that a debtor is insolvent, any “third-party application” that it makes for the insolvency of the debtor must be well substantiated.

Decision

The District Court of Hamburg recently considered an application for insolvency on grounds of illiquidity due to default in social security contributions.

A landmark decision of the German Federal Court (13 June 2006 – IX ZB 238/05) held that the illiquidity of a company could be assumed where it was in default for more than six months of social security contributions.

Filed under:
Germany, Insolvency & Restructuring, Litigation, Taylor Wessing, Insolvency
Authors:
Dr. Rembert T. Graf Kerssenbrock
Location:
Germany
Firm:
Taylor Wessing
View Original Article
Subchapter V Debtor’s Exclusive Right To File A Plan: Not A Super-Power
2023-09-21

Question

Once a Subchapter V debtor is removed from possession under § 1185(a), what happens next?

The answer to this question seems to have evolved over the few years of Subchapter V’s existence:

  • from a low-power position for debtor, early-on;
  • to a high-power position for debtor, in a re-thought view; and
  • then back to the low-power position for debtor, when problems of the re-thought view become evident.

I’ll try to explain.

Early Answer

Filed under:
USA, Nebraska, Insolvency & Restructuring, Litigation, Koley Jessen PC
Authors:
Donald L. Swanson
Location:
USA
Firm:
Koley Jessen PC
View Original Article

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