Payments made by a debtor within 90 days of a bankruptcy petition are generally avoidable as preferences under section 547 of the Bankruptcy Code. Many exceptions and defenses exist, however, to ensure that creditors are not discouraged from conducting business with companies that may be at risk of filing
Scheme Hot Topics Bulletin: Part III Schemes vs Chapter 11 June 2015 Using the key features of our case study below, we compare schemes and Chapter 11 proceedings on the following grounds: ■ jurisdiction (filing requirements and crossborder recognition); ■ moratorium; ■ scope, i.e. which creditors can be included in (or excluded from) the relevant proceedings; ■ control; ■ new money; ■ cramdown; ■ valuation; ■ third party releases; ■ disclosure; ■ market impact; ■ timing and costs; and ■ special Chapter 11 rules on oil & gas interests.
On 28 January, the English High Court handed down the first ever judgment sanctioning a restructuring plan under Part 26A of the Companies Act 2006 (“CA 2006”) (“Plan”) invoking the new cross class cram down procedure introduced into UK law in June 2020.
Many businesses are—or soon will be—unable to meet their obligations. Not all businesses in distress are unsuccessful; sometimes, as in the economic circumstances arising from the novel coronavirus (COVID-19) and the governmental directives tailored to address the related public health issues, even successful businesses must confront closures and steep declines in demand that could not have been anticipated, and may find it necessary or desirable to restructure their existing debt obligations.
Whether a contract is executory is an often-litigated issue in bankruptcy because of the treatment afforded to such contracts. Although the Bankruptcy Code does not define the term “executory contract,” most courts follow a variation of the definition provided by Professor Vern Countryman in a 1973 law review article.
In the spirit of the season, we’re (re)visited by Doron Kenter, a member of the Weil Bankruptcy Blog’s O.G. Editorial Board (and, as far as we can tell, still holder of the dubious distinction of having published the most posts for us).
It’s been an interesting couple of weeks for bankruptcy at the United States Supreme Court with two bankruptcy-related decisions released in back-to-back weeks. Last week, the Supreme Court issued an important decision delineating the scope of section 546(e) of the Bankruptcy Code (discussed here [1] for those who missed it).
In a highly-anticipated decision on a long-running bondholder dispute, the US Court of Appeals for the Second Circuit issued its judgment last week in Marblegate Asset Management LLC v Education Management Corp. It concluded that “Section 316(b) [of the US Trust Indenture Act 1939] prohibits only non-consensual amendments to an indenture’s core payment terms”, i.e. the amount of principal and interest owed and the maturity date.