In a welcome clarification for administrators, the UK Supreme Court in the recent case of R (on the application of Palmer) v Northern Derbyshire Magistrates’ Court[1], held that an administrator appointed under the Insolvency Act 1986 (IA 1986) is not an “officer” of the company for the purposes of section 194(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
Who owns cryptocurrency held by a cryptocurrency exchange? Do the cryptocurrency assets belong to the customers who deposited the crypto with the exchange, or do the cryptocurrency assets belong to the exchange itself? The answer to this question will have huge significance, both in terms of creditor recoveries as well as preferential transfer liability exposure.
A consensual resolution among all stakeholders is an important goal of any bankruptcy proceeding. But how can parties reach a consensual deal if financing is drying up quickly and the prospect of confirming a plan is grim? That was the issue facing the Rockport debtors (the “Debtors”) in their Delaware bankruptcy cases styled In re The RP Co. Liquidating, LLC. In this case, the Debtors filed a motion asking the bankruptcy court to approve a global settlement (the “Settlement”) with all parties-in-interest—except the Office of the United States Trustee (the “U.S. Trustee”).
In this article we explore the key trends which are currently shaping the landscape of private wealth disputes, including mental capacity as a central theme in private wealth disputes, trust insolvency and disputes relating to trustee investments.
Mental capacity
Mental capacity is increasingly a central theme on the landscape of private wealth disputes. Why? The starting point is that there is, more so than at any point previously, a wider recognition of the seismic consequences of establishing mental incapacity on the part of the relevant decision maker.
Between 1 April and 30 June 2023, there were 6,342 registered company insolvencies, which is the highest number of insolvencies since the second quarter of 2009, and a 9% increase on the previous quarter of 2023.
Navigating the Bankruptcy Code can present many traps for unsuspecting debtors, creditors, or asset buyers. The Delaware District Court recently reminded bankruptcy participants of an often overlooked pitfall involving the collision between (i) an unstayed bankruptcy sale order authorizing an asset sale free and clear of successor liability and (ii) federal labor law imposing successor liability on the buyer. See United Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied Industrial and Service Workers International Union, AFL-CIO, CLC v. Buyer Alloy Steel LLC, Civ. No.
John Wasty, John Riihiluoma, Lalita Vaswani and James Batten, Appleby
This is an extract from the 2024 edition of GRR's the Americas Restructuring Review. The whole publication is available here.
In summary
Elizabeth McColm, Brian Bolin and Mitchell Mengden, Paul Weiss Rifkind Wharton & Garrison
This is an extract from the 2024 edition of GRR's the Americas Restructuring Review. The whole publication is available here.
Monitoring Winding up Petitions
While not an everyday occurrence, a company being issued with a winding up petition is an eventuality that all providers of finance, whether on a secured or unsecured basis, will prepare for.
From a contractual perspective, facility agreements will include specific monitoring information covenants as part of the core relationship housekeeping, supported by a hard backstop of event of default triggers, with rights for debt acceleration, and (if applicable) security enforcement operating in tandem from that point.
Gianfranco Lotito and Andrés Ignacio Lafuente Quiroz, Cuatrecasas
This is an extract from the 2024 edition of GRR's the Americas Restructuring Review. The whole publication is available here.