When the COVID-19 Pandemic incepted, and issues arose as to whether affected policyholders could seek Business Income and Civil Authority coverage from the presence or suspected presence of SARS-CoV-2 and consequent orders of Civil Authority, I thought that the easiest question to answer was whether such policyholders had suffered physical loss or damage (“PLOD”) to their property.
The Majority PLOD Rule Prior to COVID-19
. . . In such circumstances, sealing the indictment “would undermine the purpose of having a statute of limitations at all.”
Introduction
With many airlines having weathered the storm of the Covid-19 pandemic, one common theme with airline restructurings has been a clear reliance on the United States’ Chapter 11 bankruptcy proceedings – particularly over their domestic jurisdictions or other viable jurisdictions (such as a UK scheme of arrangement or UK restructuring plan). But when seeking to restructure, why have many airlines tended towards Chapter 11 bankruptcy proceedings as an internationally recognised restructuring procedure and shied away from the UK schemes?
This year was set up for disappointment in restructuring activity, given high levels of Chapter 11 filings and debt defaults in 2023 — especially in 1H23 — as well as the resurgence of leverage credit issuance since late 2023 that has allowed many distressed companies to address near-term debt maturities or liquidity challenges without a formal restructuring event. Restructuring activity in 2024 is almost certain to come up short of last year’s high bar; the only question is by how much.
A new, bipartisan bankruptcy bill in the U.S. Senate purports, according to an official document, to:
An appeals court has issued an insightful decision on the availability of damages when an involuntary bankruptcy petition is filed in bad faith. See Stursberg v. Morrison Sund PLLC, No. 23-1186, 2024 U.S. App. LEXIS 20286 (8th Cir. Aug. 13, 2024).
The decision addresses both the interplay between Bankruptcy Code sections 303 and 305 and federal preemption of state law.
Under federal law, a debtor may be criminally prosecuted for various kinds of misconduct in connection with a bankruptcy case, including concealing assets, falsifying information, embezzlement, or bribery. See 18 U.S.C. §§ 152, 157. The U.S. Trustee, which serves as a watchdog over the bankruptcy process, will refer such cases to the U.S. Attorney’s Office for investigation and prosecution.
In MaIlinckrodt PLC v. Sanofi-Aventis U.S. LLC, No. 23-1111, the U.S. Court of Appeals for the Third Circuit affirmed a Delaware bankruptcy court decision finding a debtor’s obligation to pay a perpetual royalty was an unsecured claim that was dischargeable in bankruptcy. The decision is a cautionary tale for contract counterparties that negotiate future payment rights.
Background
An assignment for the benefit of creditors (ABC) is a process by which a financially distressed company (referred to as the assignor) transfers its assets to a third-party fiduciary (referred to as the assignee). The assignee is responsible for liquidating those assets and distributing the proceeds to the assignor's creditors, pursuant to the priorities established under applicable law. From the perspective of a creditor, there are many important distinctions between an ABC and a bankruptcy case.
Key Issues
Question: Can a retirement fund organized under Canadian law qualify for a state law exemption requiring that it “qualify as a retirement plan” under the Internal Revenue Code?
This question gets all the way to the U.S. Seventh Circuit Court of appeals, which issues a “No” answer, in Green v. Leibowitz, Case No. 23-2841 (decided 7/16/2024).