Part 1 – Celsius Bankruptcy
Since online auctioneer Paddle 8 filed for bankruptcy protection in March, creditors of the company have begun filing their notices of claim in the bankruptcy case. One thing on which the creditors all seem to agree is that the current assets of Paddle 8 will be insufficient to cover its debts by a considerable margin. Paddle 8’s lenders and commercial landlord are by far the largest creditors, and standing out from the crowd will be difficult.
The emergence of COVID-19 (the Coronavirus) at the end of 2019 has had an unprecedented impact on the global economic system. This alert focuses on the effect the Coronavirus pandemic is likely to have on small and medium sized businesses (SMEs), their lenders in the UK and the options available to continue trading and avoid insolvency.
This alert was written by Geoffrey Wynne, Alexandra Shipulina and Szonja Kolbenheyer (trainee solicitor)
The Act
The Corporate Insolvency and Governance Act 2020[1] ("the Act") received Royal Assent on 25 June 2020. The overarching purpose of the Act is to protect as many businesses as possible from falling into administration or insolvency as a result of the disruptions and hardship caused by the pandemic.
Article 55 of the Bank Recovery and Resolution Directive (BRRD) (2014/59/EU) requires Member States to ensure that a bail-in clause is included in agreements containing liabilities of a regulated Member State financial institution which are governed by the law of a third country.
Renewable energy industry participants are hungrily eyeing the tiny U.S. commonwealth of Puerto Rico, trying to determine whether the island’s debt crisis-driven troubles – which recently put a halt on development activities on the island - are at an end. Until recent issues arose, the island was a hotbed of renewable energy activity. High energy prices, high insolation and the promise of 20 MW-plus deals with a government-backed utility generated excitement throughout the solar community.
Early last week the online auctioneer Paddle 8 filed for Chapter 11 bankruptcy in the Southern District of New York, on the heels of a recent lawsuit demanding payment for works of art sold at a charitable auction last November.
The novel coronavirus COVID-19 pandemic has the potential to impact the U.S. economy at a level which could ultimately rival or surpass the global financial crisis of 2009. Reports from commercial landlords suggest that a majority of retail and restaurant tenants, perhaps as many as 75%, failed to make payments of rent due on April 1st.
On Friday, October 26, 2018, the U.S. Supreme Court granted certiorari in what could be a landmark decision concerning trademark issues in bankruptcy. In Mission Product Holdings, Inc. v. Tempnology LLC, the Court will resolve a Circuit Court split and determine whether a debtor-licensor can strip away the rights of its trademark licensees by rejecting its trademark licensing agreements as part of its bankruptcy case.
Courts are often faced with the situation in which affiliated debtors file for Chapter 11 reorganization and request to have their cases jointly administered. While joint administration does not, without more, cause substantive consolidation of the assets and liabilities of the corporate group, jointly-administered debtors may propose a single plan of reorganization that establishes the recovery for all of the debtors’ creditors.