Imagine that you are an unsecured lender who has learned that a borrower has filed for bankruptcy and has little to no assets available to pay creditors. Is there any way to prevent your debt from being extinguished? This is a common question and often the answer unfortunately is no; however, if the debtor is an individual and the debt meets certain requirements established by the Bankruptcy Code, the court may declare the debt nondischargeable (in other words, the debt will remain with the debtor after the bankruptcy case is closed).

(6th Cir. B.A.P. May 11, 2016)

The Bankruptcy Appellate Panel reverses the bankruptcy court’s order allowing the unsecured creditor’s late-filed claim in this Chapter 13 case. The creditor filed its claim eight days after the bar date, and the bankruptcy court allowed the claim based on excusable neglect. The B.A.P. holds that a bankruptcy court does not have authority to extend the deadline in Rule 3002(c) through equitable powers or the doctrine of equitable tolling. Opinion below.

Judge: Humphrey

Consumers could be set to jump up the insolvency hierarchy if Parliament backs the latest Law Commission recommendations.

The Law Commission’s report, Consumer Prepayments on Retailer Insolvency, recommends, among other things, that consumers who prepay for goods or services over £250 in the six months prior to a formal insolvency process should be paid out as preferential creditors instead of unsecured creditors.

A new fee structure in respect of insolvency fees payable to the Insolvency Service came into force on 21 July 2016, pursuant to The Insolvency Proceedings (Fees) Order 2016 (SI 2016/692) (the “Order”), which revokes The Insolvency Proceedings (Fees) Order 2004 (SI 2004/593) and all ten subsequent amendment orders.

In our recent note “Treatment of senior unsecured debt in European leveraged finance transactions: the need for an intercreditor agreement”, which can be viewed here, we addressed the increase in flexibility in European financings to incur senior unsecured debt and the risk that the lack of any agreed intercreditor arrangement may impair senior secured lenders’ ability to realise recoveries from a European Credit

Two major Slovakian construction companies, both heavily dependent on large state contracts, have recently been restructured. Both of these cases have proven that Slovakian entrepreneurs, even those who live off of public money, perceive and utilise the current regulation of the restructuring procedure as a “legally safe way” to restart their businesses and get rid of a large portion of creditors. This option is viable also in a moment, when the only solution clearly is a bankruptcy petition.

The case concerning the Game group of companies' administration has now been played out in the Court of Appeal and the eagerly anticipated judgment has been handed down.

The issue at stake concerned a landlord's ability to recover rent as an expense of administration (and therefore payable before other creditors) where such rent is payable in advance but where the tenant's administration occurs immediately before a quarter day's rent falling due.

Relief for lenders and administrators as UK Supreme Court reverses “super-priority” status of pensions liabilities in insolvency ranking.

The Court of Appeal’s decision in the matters of Nortel GMBH and Lehman Brothers International (Europe) (both in administration) and other companies has been overturned by the Supreme Court. Liabilities imposed on insolvent companies by the Pensions Regulator (“tPR”) will not be treated as an expense of the insolvency, which would be payable by the office holder in advance of making payment of his own remuneration or to floating charge holders. The liability will rank as an unsecured debt rateably with all other unsecured creditors.

The Supreme Court has handed down its highly anticipated judgment in the joint Nortel Networks/Lehman Brothers appeal.  The administrators of Nortel and Lehman Brothers entities had appealed against the Court of Appeal’s decision that Financial Support Directions (FSDs) issued by the Pensions Regulator (“the Regulator”) after the appointment of administrators attracted priority status as an administration expense.  Rejecting the decision of the lower courts, the Supreme Court ruled that an FSD issued during the course of an administration will rank as a provable debt rather than a