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 apply extraterritorially to avoid the transfer and recover the transferred assets. A pair of bankruptcy court rulings handed down in 2017 widened a rift among the courts on this issue.

In Weisfelner v. Blavatnik(In re Lyondell Chemical Company), 2017 BL 131876 (Bankr. S.D.N.Y. Apr. 21, 2017), the bankruptcy court presiding over the chapter 11 case of Lyondell Chemical Company ("Lyondell") handed down a long-anticipated opinion in the protracted litigation concerning the failed 2007 merger of Lyondell with Basell AF S.C.A. ("Basell"), a Netherlands-based petrochemical company.

On February 8, 2017, the U.S. District Court for the Western District of Oklahoma dismissed the class action lawsuit brought by unsecured bondholders of Chesapeake Energy Corporation ("Chesapeake"), adopting the so-called narrow reading of Section 316(b) of the Trust Indenture Act of 1939 ("TIA").[1]

Section 350(b) of the Bankruptcy Code permits a bankruptcy court under certain circumstances to reopen a bankruptcy case even after the estate has been fully administered and the case is closed. In In re Atari, 2016 BL 125936 (Bankr. S.D.N.Y. Apr. 20, 2016), the U.S. Bankruptcy Court for the Southern District of New York explored the circumstances under which it may be appropriate to reopen a closed chapter 11 case.

Background

On 7 December 2015, the Australian Government released its "National Innovation and Science Agenda" ("Agenda"). In the Agenda, the Government outlined its intention to make three significant reforms to Australia's insolvency laws, adopting the recommendations of the Productivity Commission ("Commission") in its report, "Business Set-Up, Transfer and Closure" ("Report"), released on the same day as the Agenda:

Key Points  

In a matter of first impression, the Delaware Court of Chancery held inQuadrant Structured Products Co. Ltd. v. Vertin, No. 6990-VCL, 2015 BL 128889 (Del. Ch. May 4, 2015), that a creditor suing derivatively on behalf of an insolvent corporation does not lose standing to prosecute the derivative claims if the corporation becomes solvent while the lawsuit is pending. In so ruling, the court expressly rejected a “continuous insolvency” or an “irretrievable insolvency” requirement for standing purposes.

Supreme Court to Resolve Circuit Split on Constitutionality of U.S. Trustee Fee Hike

A secured creditor's right to "credit bid" the amount of its allowed claim in a bankruptcy sale of its collateral is an important creditor protection codified in section 363(k) of the Bankruptcy Code. Even so, a ruling recently issued by the U.S.

In In re Nuverra Environmental Solutions, Inc., 834 Fed. App'x 729 (3d Cir. 2021), the U.S. Court of Appeals for the Third Circuit handed down a long-awaited ruling that could have addressed, but ultimately did not address, the validity of "gifting" chapter 11 plans under which a senior creditor class gives a portion of its statutorily entitled recovery to one or more junior classes as a means of achieving consensual confirmation.