Background
German insolvency law prohibits managing directors from making payments on behalf of the company after it has become illiquid or over-indebted. This does not apply to payments made when acting with the due care and diligence of a prudent business manager. Such payments are privileged as they do not reduce the insolvency estate and do not disadvantage creditors if they allow the business to continue and enable corporate recovery.
Decision
Overview and Why This Case Matters
Recently, by a judgment dated 30 May 2022, a three-judge bench of the Supreme Courtin the case of Kotak Mahindra Bank Limited versus A. Balakrishnan & Anr (Judgment dated 30 May 2022 in Civil Appeal No. 689 of 2021) held that a recovery certificate issued the Recovery of Debts and Bankruptcy Act, 1992 (RDB Act) would qualify as a “financial debt” under the Insolvency and Bankruptcy Code, 2016 (IBC), and give rise to a fresh cause of action under section 7 of the IBC.
The High Court has sanctioned the restructuring plan of ED&F Holdings Ltd, providing further clarity on the exercise of its discretion to sanction a plan using cross-class cram down.
Background
At the convening hearing, the court ordered that five creditor and two member class meetings be held. All but one of the creditor classes approved the plan by large majorities.
Sanction hearing
Legal proceedings were initiated in front of the Luxembourg district court by a public limited liability company (société anonyme), seeking the deletion of bankruptcy filings made with the Luxembourg Trade and Companies Register (hereinafter "RCSL"). The company had been declared bankrupt by judgment of the Luxembourg district court and such court decision had been filed and published with the RCSL.
In a recent judgment1, the Singapore High Court allowed the liquidator of insolvent Castlewood Group to enter into a litigation funding arrang
Public examination can be a useful tool for parties in a liquidation to obtain information about matters relating to a company’s affairs. In the matter of Jewel of India Holdings Pty Ltd ACN 141 963 813 (in liquidation) [2022] NSWSC 356, the Court considered whether summonses for public examination, that were issued by the former owner of the business to the liquidators and former administrators of Jewel Holdings, constituted an abuse of process.
“No State shall . . . pass any . . . Law impairing the Obligation of Contracts.”
–Art. I, Sec. 10, U.S. Constitution
Increasingly, states are expanding their laws on debtor/creditor relationships, such as receiverships and assignments for benefit of creditors.
Some of these expansions look suspiciously like a Bankruptcy Code Lite—e.g., adding “stay” provisions.
And that can be a constitutional problem, according to long-standing (and recent) opinions of the U.S. Supreme Court.
What follows is a brief summary of three such opinions.
There’s a new U.S. Circuit Court opinion on a person’s right to a jury trial, when sued by the Securities and Exchange Commission before one of its administrative judges.
And guess what:
On April 28, 2022, Central District of California Bankruptcy Judge Ernest M. Robles issued a decision regarding the eligibility of a debtor to proceed as a Small Business Debtor under Subchapter V of the Bankruptcy Code.