Summary

An Illinois appellate court, applying Indiana and federal law, has held that neither a bankruptcy exclusion nor an insured versus insured exclusion applied to bar coverage for claims brought by a bankruptcy trustee.  Yessenow v. Exec. Risk Indem., Inc., 2011 WL 2623307 (Ill. App. Ct. June 30, 2011).

The ability to sell an asset in bankruptcy free and clear of liens and any other competing “interest” is a well-recognized tool available to a trustee or chapter 11 debtor in possession (“DIP”). Whether the category of “interests” encompassed by that power extends to potential successor liability claims, however, has been the subject of considerable debate in the courts. A New York bankruptcy court recently addressed this controversial issue in Olson v. Frederico (In re Grumman Olson Indus., Inc.), 445 B.R. 243(Bankr. S.D.N.Y. 2011).

On June 13, the Pension Benefit Guaranty Corporation (“PBGC”) released a final rule that, in most cases, will reduce the amount of pension benefits guaranteed under the agency’s single-employer insurance program when a pension plan is terminated in a bankruptcy case. The rule will also decrease the amount of pension benefits given priority in bankruptcy.

The Law on Enterprise and Law on Investment that took effect in 2015 introduced refreshing changes to Vietnam’s investment and business landscape. Designed to stimulate and better facilitate foreign investments in the country, the two new laws have since given rise to several implementing regulations that expound on important subjects such as foreign ownership up to 100% in listed companies, private public partnerships, trade, and representative offices.

1.1. If you are a creditor

Creditors often file normal lawsuits to collect the debts instead of using bankruptcy proceedings, because:

The implementation of restrictions on stock and/or claims trading has become almost routine in large chapter 11 cases involving public companies on the basis that such restrictions are vital to prevent forfeiture of favorable tax attributes that can be triggered by a change in control. Continued reliance on stock trading injunctions as a means of preserving net operating loss carry forwards, however, may be problematic, after the controversial ruling handed down in 2005 by the Seventh Circuit Court of Appeals in In re UAL Corp.

In Trenwick America Litigation Trust v. Ernst & Young, LLP, 906 A.2d 168 (Del. Ch. 2006), the Delaware Court of Chancery definitively weighed in on the tort claim that has become known by the popular name “deepening insolvency” when it dismissed a “deepening insolvency” claim brought by a litigation trust to recover money for the benefit of the creditors of a bankrupt estate.

Investors who hold both debt and equity in a financially distressed company may be confronted with efforts to have their debt investments recharacterized as equity. Recharacterization is an equitable remedy that bankruptcy courts have used as a basis to look past the form and characterization of an obligation as debt and find the subject obligation to be equity. In his recent decision in Official Comm. of Unsecured Creditors of Radnor Holdings Corp. v. Tennenbaum Capital Partners, LLC (In re Radnor Holdings Corp.), Adv. Proc. No. 06-50909 (Bankr. D. Del.

In brief: Vietnam's new Law on Bankruptcy will take effect from 1 January 2015, bringing in a number of changes, including a new definition of 'bankruptcy'. Partner Robert Fish (view CV)and Junior Associates Giang Quang Nguyen and Linh Nguyen look at the most significant features of the new law and note what will differ from the current regime.