On June 19, 2024, the Insolvency and Bankruptcy Board of India (IBBI) released a discussion paper proposing to bring in significant amendments to the IBBI (Insolvency Resolution Process for Corporate Process) Regulations, 2016 (CIRP Regulations), aiming to streamline the process, enhance its effectiveness and reduce delays.[1] It complements the plan, unveiled earlier this month, to reduce the compliance burden on insolvency professionals.

Federal Law Decree No 51 of 2023 concerning Financial Restructuring and Bankruptcy (the New Bankruptcy Law) came into effect in the UAE on 1 May 2024 and repealed the previous bankrupcty law, Federal Decree Law No 9 of 2016 (the Old Bankruptcy Law). All regulations issued under the Old Bankruptcy Law remain in force until new regulations are published, which will further clarify a number of points.

Deal structure matters, particularly in bankruptcy. The Third Circuit recently ruled that a creditor’s right to future royalty payments in a non-executory contract could be discharged in the counterparty-debtor’s bankruptcy. The decision highlights the importance of properly structuring M&A, earn-out, and royalty-based transactions to ensure creditors receive the benefit of their bargain — even (or especially) if their counterparty later encounters financial distress.

Background

Die maßgeschneiderte Sanierungslösung für den Fußballverein in der Krise ist elementar für den zukünftigen Erfolg.

The Hon’ble Supreme Court (“H SC”) in the matter of Global Credit Capital Limited & Anr v. Sach Marketing Private Limited & Anr[i] has passed common judgement wherein it has upheld the order of National Company Law Appellate Tribunal which categorized lenders as financial creditors for the purpose of Insolvency & Bankruptcy Code, 2016 (“Code”). 

Factual Aspect:

In a decision that will have substantial impact on the owners of businesses that seek relief in bankruptcy where the business owners themselves seek releases from personal liability, the U.S. Supreme Court has struck down the validity of nonconsensual third-party releases in an opinion issued Thursday, June 27, 2024. The case arose from the bankruptcy proceedings of drugmaker Purdue Pharma, owned by Sackler family members. The decision potentially exposes the Sackler family members to personal liability relating to Purdue Pharma’s sale of opioid medications.

In this week’s TGIF, we examine the High Court’s recent decision in Greylag Goose Leasing 1410 Designated Activity Company & Anor v P T Garuda Indonesia Ltd [2024] HCA 21. In the decision, a majority of the High Court upheld the New South Wales Court of Appeal decision that foreign state immunity extends to a state-owned national airline subject to winding-up proceedings.

The Alita matter serves as a good illustration that if you intend to seek leave under section 444GA(1)(b) you should act swiftly and with regard to the potential regulatory risk.

The intention of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘IBC’) is to rehabilitate the companies and individuals by way of the Corporate Insolvency Resolution Process (hereinafter referred to as ‘CIRP’).

Unlike traditional Chapter 11 bankruptcy cases, sometimes called "free fall" cases, where a debtor files for bankruptcy and determines its path out of bankruptcy over the course of the following months, some debtors enter into bankruptcy with a plan entirely (or mostly) drafted, with an emergence strategy already completed. In these cases, debtors enter bankruptcy with pre-packaged plans or pre-negotiated plans (sometimes called pre-arranged plans) ready to file on or just after their petition date.