In its fifth trip to the Seventh Circuit Court of Appeals, the Sentinel Management Group’s bankruptcy case recently explored complex issues bankruptcy practitioners often encounter in large chapter 11 cases with financial services debtors.

Recently, the bankruptcy court presiding over the Energy Futures chapter 11 case issued an opinion analyzing the interplay between an intercreditor agreement’s distribution waterfall and payments to be made under the debtors’ multi-step reorganization plan. The court rejected a secured creditor’s argument that the intercreditor agreement’s distribution waterfall was triggered by one step of that reorganization.

On 6 April 2017, new Insolvency Rules came into force which will affect creditors’ rights in most insolvency procedures. More information on the insolvency changes generally are available in this blog post.

In a prior blog post, we discussed the Second Circuit Court of Appeals’ reversal of the bankruptcy court in In re General Motors. In its opinion, the Second Circuit held that a sale of assets without proper notice to potential plaintiffs with defect claims violated the plaintiffs’ due process rights and resulted in a sale to “New GM” that was not, in fact, “free and clear” of those claims.

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).

It has almost been 12 months since the Administration (Restrictions on Disposal etc to Connected Persons) Regulations 2021 came into force on 30 April 2021. The regulations require an administrator to obtain creditor approval or a report from an independent evaluator in advance of completing a “substantial disposal” of the company’s property to a connected party within the first eight weeks of the administration.

As has been widely reported, the recent energy price volatility (coupled with the price cap limiting suppliers’ ability to pass increased costs on to consumers) has caused a number of energy supply company failures. Yesterday saw the announcement of the collapse of Bulb, one of the UK’s largest energy suppliers, with it being due to be placed into special administration very shortly.

This is the first energy special administration we’ve seen. So how are the insolvency rules different for energy companies? What is a special administration, and why is this the first one?