One concept—“center of main interests,” or COMI for short, one of the more significant elements borrowed from international law and incorporated into Chapter 15 of the Bankruptcy Code—sits at the heart of the latter, enacted in 2005 as the latest U.S. legislative attempt to handle cross-border insolvencies and international restructurings.
In spite of this notion’s importance, however, bankruptcy and appellate federal courts have long divided over a thresholder issue: as of which date should a foreign debtor’s COMI be determined?
In a unanimous decision Bartenwerfer v Buckley, No. 21-908, 598 U.S. (2023), the U.S. Supreme Court reviewed the breath of the U.S. Bankruptcy Code’s discharge provision – and exceptions thereto – and held that a debt resulting from fraud (even where the debtor was not directly involved) is, nevertheless, nondischargeable. While the Court’s principles provide a roadmap for analyzing potentially nondischargeable claims, it also expands what was originally thought to be a “narrow” exception to discharge.
WithinIn re LTL Management, LLC, No. 22-2003 (3d Cir. Jan. 30, 2023), the United States Court of Appeals for the Third Circuit issued its decision on the J&J “Texas –Two Step” bankruptcy saga. The Court’s decision complimented the parties and the lower court for their thorough analysis of the issues, but refocused practitioners on a basic bankruptcy principle:
[A bankruptcy filing] gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.
The U.S. Supreme Court has ruled that bankruptcy filers cannot avoid debt incurred by another’s fraud.
The 9-0 ruling, written by Justice Amy Coney Barrett, unanimously rejected Kate Bartenwerfer's bid to use U.S. bankruptcy code protection to eliminate debts on the grounds that she was unaware of fraudulent omissions made by her husband.
At a time when, globally, insured businesses are under severe financial strain, the availability and extent of their insurance assets take on a new significance. It is significant not just for troubled businesses and their insurers, but also for third parties with potential or actual claims against those businesses.
Chapter 11 bankruptcy as a means for resolving mass tort claims
The current law regarding insolvency in the UAE is not a comprehensive regime, and the present framework is found across three different laws (mainly in the Commercial Companies Law, as well as the Commercial Transactions Law and the Civil Code). Additionally, companies faced harsh penalties in a bankruptcy scenario, and individuals could also face criminal sanctions and penal sentences. In the wake of low oil prices since 2015, and more companies facing distress, a new bankruptcy law drawing from international best practice will come into force in the UAE, from the beginning of 2017.
On October 14, 2022, the U.S. Court of Appeals for the Fifth Circuit affirmed the decision of the U.S. Bankruptcy Court for the Southern District of Texas (Isgur, J.) allowing a claim against a solvent debtor for a make-whole premium and post-default interest totaling approximately $387 million. Ultra Petroleum Corp., et al. v.
The Commercial Rent (Coronavirus) Act 2022 provided tenants in the retail and leisure sectors who had subsisting rent arrears incurred between March 2020 and August 2021 with immunity against enforcement action from landlords. However, that immunity was only for a period of 6 months from March 2022. During that window, either landlord or tenant were able to refer the matter to arbitration if they did not come to a commercial settlement.
The final date for arbitration referrals was 23 September 2022.