The Federal Court of Justice has lowered the threshold for the approval of an insolvency plan by the insolvency court.

Background

The English Court has, for only the second time, made a compensation order under the Company Directors' Disqualification Act 1986 against a disqualified director.

Background

The U.S. Trustee is on a crusade to eradicate every type of third-party release from all Chapter 11 bankruptcy plans—no matter what the facts or circumstances might be.

It’s a policy based on the idea that, if the Bankruptcy Code doesn’t specifically and explicitly authorize something, then that something cannot be done . . . ever . . . under any circumstances . . . no matter what . . . period . . . end of story.

We now have another manifestation of that bright-line and unyielding position. Fortunately, the Bankruptcy Court rejects the U.S. Trustee’s objection.

On the 1st of November 2023 the Supreme Court published its judgment in the case of R (on the application of Palmer) (Appellant) v Northern Derbyshire Magistrates Court and another (Respondents) following a one-day hearing in March. Philip Jones and David Garner report on the hearing in this article.

The Court of Appeal recently considered when precisely a company had given a preference within the meaning of the Insolvency Act 1986 – a question of timing which may impact on whether an insolvency practitioner can later unwind the preferential treatment for the benefit of creditors as a whole.

Here we look at what a preference is, and when it is deemed to be given.

Preferences

Any restructuring where there are multiple tiers of debt and lenders with different interests and views can be tricky. Lenders will try to anticipate these difficulties by entering into an intercreditor agreement (an ICA) setting each lender’s ranking and rights to enforce. Typically, an ICA will allow the senior lenders at least the option of taking the lead on an enforcement or a restructuring.

Over the past several years, unitranche facilities have become increasingly prevalent. This growth has been driven by the ever-growing class of private credit and direct lenders who initially developed the unitranche facility structure, along with traditional bank lenders now joining this market. The unitranche structure has several advantages, including typically quicker execution for the parties involved and in some cases a lower cost of capital to the borrower.

As discussed in our post last month, it was a long road for Arrowood Indemnity to be placed into liquidation in Delaware.

The overwhelming majority of my practice has involved larger, complex Chapter 11 cases and out-of-court restructurings, representing debtors, Chapter 11 trustees, committees, or creditors. However, with the expansion during Covid of the Subchapter V debt limit to $7.5 million, I have found myself participating in multiple Subchapter V cases as counsel to creditors. I discovered quickly that habits developed in larger Chapter 11 cases do not necessarily translate to Subchapter V.

What is a Bankruptcy Notice?