The Consolidated Appropriations Act, 2021 (CAA), enacted in December 2020, expands on the advantageous reorganization terms already available for distressed companies under Subchapter V of Chapter 11 of the Bankruptcy Code. Now, reorganizing companies have more time to decide whether to keep or reject real property leases and can stretch out lease obligations under a reorganization plan. These benefits build on the important advantages already available in Subchapter V:
General partner-led fund restructurings accounted for the majority of private equity secondaries volume in 2020 as managers sought liquidity in a flat exit market
Private equity (PE) fund general partners (GPs) faced a challenging year for returning cash to their investors, leading many to turn to GP-led fund restructurings to create liquidity for investors as fund lives expire.
One year ago, we wrote that the large business bankruptcy landscape in 2019 was generally shaped by economic, market, and leverage factors, with notable exceptions for disastrous wildfires, liabilities arising from the opioid crisis, price-fixing fallout, and corporate restructuring shenanigans.
The year 2020 was a different story altogether. The headline was COVID-19.
In the latest chapter of more than a decade of litigation involving efforts to recover fictitious profits paid to certain customers of Bernard Madoff's defunct brokerage firm as part of the largest Ponzi scheme in history, the U.S. Court of Appeals for the Second Circuit held in In re Bernard L. Madoff Investment Securities LLC, 976 F.3d 184 (2d Cir.
The Bottom Line
The National Rifle Association (“NRA”), along with its wholly owned Texas subsidiary, filed for chapter 11 bankruptcy protection on January 15, 2021 in the Bankruptcy Court for the Northern District of Texas. The case already has presented several threshold issues and challenges that are of interest to both bankruptcy practitioners and the market as a whole.
Background
The Sixth Circuit recently ruled that an agricultural "multi-service finance company" had no claim to the proceeds of produce held in trust pursuant to the Perishable Agricultural Commodities Act ("PACA")1 and could not circumvent the security interests of a senior lender. The unpublished decision,2 which relied upon established law in the Ninth, Second, and Third Circuits (among others), serves as a reminder to financers in the agribusiness space--and beyond--of the risks inherent in lending in an uncertain economic environment.
Background
The new German stabilizing and out of court restructuring regime came into effect on 1 January 2021. The "Stabilization and Restructuring Framework of Companies Act", known as StaRUG1, heralds a new phase in the German restructuring landscape, introducing a framework of tools including a new restructuring plan, which will enable debtors to restructure and cram down minority creditors outside of German insolvency proceedings for the first time.
The long-anticipated wave of civil enforcement actions involving participants in the Paycheck Protection Program (PPP) has begun.
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to avoid fraudulent transfers is an important tool promoting the bankruptcy policies of equality of distribution among creditors and maximizing the property included in the estate.