As they say, what one hand giveth, the other hand taketh. In its recent decision in In re MPM Silicones, LLC, the U.S. Court of Appeals for the Second Circuit addressed make-whole premiums and cramdown rates of interest (among other issues not addressed here), issuing rulings that will impact creditors and debtors alike.

Are arbitration clauses enforceable in a bankruptcy case? Last month, the U.S. District Court for the Eastern District of Arkansas said “yes” and held that state law causes of action that arose out of alleged breaches of contract and other state law theories of liability should be arbitrated as agreed to by the parties in their pre-petition contracts rather than litigated in the bankruptcy court. Gavilon Grain LLC v. M.

In a corporate world where the capital structures of companies are becoming increasingly complex, schemes of arrangements under the Companies Act 2006 have established themselves as the restructuring procedure of choice for many distressed companies. This popularity is evidenced by the fact that schemes of arrangement have been increasingly used by overseas companies wishing to restructure their debts under the flexibility offered by English law.

As of 25 April 2017, for courts within the Chancery division of the High Court in London, the filing of all applications, forms and documents must be performed electronically. This includes the Bankruptcy and Companies Courts within Greater London. It does not apply to the High Courts outside London.

The recent Chancery Division judgment in Re Gracio Property Company Limited [2017] B.C.C 15 (“Gracio”) saw the court make an order for a compulsory liquidation without any winding-up petition having been issued.

The facts

While the number of corporate insolvencies in Germany has declined over the last couple of years, the general market perception is that the number of insolvencies may increase again in 2017. Also, as more larger companies are facing distressed situations, the overall value of distressed debt is therefore expected to rise as well.

The legal framework for restructuring & insolvency in Germany will also change in 2017, not only based on domestic legislation, but also because of developments on the EU level.

Recently, in Caesars Entertainment Operating Co. (“Caesars”), U.S. Bankruptcy Judge A. Benjamin Goldgar denied payment of indenture trustee Wilmington Trust’s attorneys’ fees and costs in connection with the Debtors’ motion to approve a settlement. The U.S. Trustee objected to payment arguing that the Debtor could not rely on 11 U.S.C. § 363 (seeking settlement approval) as authority to pay Wilmington Trust’s fees and costs. Sustaining the U.S.

“Reasonably equivalent value” – – part of the standard for evaluation of potential constructive fraudulent transfers – – is both subjective and imprecise. The words “equivalent value” require the court to make a subjective judgment whether consideration received in exchange for a transfer is worth the same as the consideration transferred by the debtor. And the considerations exchanged by the two parties are necessarily of differing characters. A transaction may involve the exchange of money for a tangible asset or for services.

The administrations of BHS and Austin Reed have been well publicised. Both had agreed CVAs before ending up in administration, prompting us to analyse the success rate of the CVA. Between 2009 and 2016, CVAs were entered into by JJB Sports plc, Focus Do It All, Discover Leisure, Blacks, Fitness First, Travelodge, Mamas and Papas, Austin Reed and BHS. Out of these nine companies, only three continue to trade (Fitness First, Travelodge and Mamas and Papas).

On 5 April 2022, the UK government published the first review of the Insolvency (England and Wales) Rules 2016 (the Rules) (the Report). It is evident from the Report that many respondents took the opportunity to raise issues faced in practice, not just with the Rules, but with the operation of the insolvency legislation in general.