DoCA’s: Discriminating between Creditors -Is it for a Proper Purpose
Canstruct Pty Limited v Project Sea Dragon Pty Limited (No. 4) [2024] FCA 112 ("Canstruct")
One of the fundamental goals of a chapter 11 bankruptcy is the maximization of value available for distribution to creditors. The "absolute priority rule" generally applicable in chapter 11 requires that each class of impaired and unaccepting creditors be paid in full before any junior class of claims or interests may receive distributions under the plan. Courts recognize a limited exception to the absolute priority rule, however, allowing prepetition shareholders to retain their interest in the debtor where they contribute new value toward the debtor's reorganization.
A Massachusetts Bankruptcy Court’s recent appellate decision in Blumsack v. Harrington (In re Blumsack) leaves the door open for those employed in the cannabis industry to seek bankruptcy relief where certain conditions are met.
While there is a statutory requirement to register most forms of security granted by limited companies incorporated in the UK at Companies House, it is worth remembering that there is no statutory requirement for the holder of registered security to inform Companies House if, e.g., the debt secured by a registered charge has been satisfied.
Summary
In the first appeal of a restructuring plan under Part 26A Companies Act 2006, the English Court of Appeal unanimously set aside the first instance decision sanctioning the plan proposed by AGPS BondCo PLC, part of the Adler real estate group1.
Established in 2015 as a trusted neutral forum to meet increasing demand for effective transnational dispute resolution, the Singapore International Commercial Court (the "SICC") is a division of the General Division of the High Court and part of the Supreme Court of Singapore. On January 18, 2024, the SICC handed down its first insolvency-related ruling.
The High Court has handed down an important decision confirming that an unrecognised foreign judgment can be used to form the basis of a bankruptcy petition.
In rejecting the bankrupt’s appeal, the court confirmed that a debt arising pursuant to such a judgment is capable of constituting a “debt” for the purposes of section 267 Insolvency Act 1986 (the Act), despite the fact that the underlying judgment had not been the subject of recognition proceedings in England.
Facts
Ever since unpaid taxes due to HMRC were “crammed down” pursuant to a restructuring plan that it voted against but did not actively oppose in Houst,1 HMRC has challenged restructuring plans and asserted its interests more aggressively, causing the failure of restructuring plans inNasmyth
Businesses often rely on trade credit insurance to protect themselves from customers’ inability to pay for products or services. An interesting question that arose recently in the Indian insolvency context was that when a creditor’s claim for pending dues is paid out by an insurer, can the creditor, having received such pay-out, maintain an insolvency action against the debtor? The National Company Law Tribunal (“NCLAT”) has answered this in the affirmative.
Two recent cases out of the Third Circuit and the Southern District of New York highlight some of the developing formulas US courts are using when engaging with foreign debtors. In a case out of the Third Circuit, Vertivv. Wayne Burt, the court expanded on factors to be considered when deciding whether international comity requires the dismissal of US civil claims that impact foreign insolvency proceedings.