Debtor-in-possession financing (“DIP financing”), which is new short-term financing obtained by an insolvent company after the commencement of an insolvency proceeding, is a recurring theme for two primary reasons. First, insolvent companies are generally desperate for an immediate infusion of cash to sustain operations. Second, creditors will usually provide such financing only on a super-priority basis, jumping ahead of existing secured creditors of the insolvent company.
Introduction This briefing complements our other publications on corporate restructuring and the sale or purchase of distressed assets.
What are the options for companies in financial difficulty in the PRC?
On August 18, 2011, Mr. Justice Morawetz, of the Ontario Superior Court of Justice, released an important decision in regard to preference actions in the matter of Tucker v. Aero Inventory (UK) Limited (together with Aero Inventory plc, Aero).
Background
Before 1993, the question of whether a creditor of a corporation being wound up had received an unfair preference from that corporation was determined under section 122 of the Bankruptcy Act 1966 (Cth). In 1993, a new Part 5.7B was inserted into the Corporations Act to deal with voidable transactions such as unfair preferences. Since then two lines of divergent judicial authority have developed:
The restructuring proceedings of Canwest Publishing Inc and affiliated entities (“Canwest”) has recently provided secured lenders and particularly debtor-in-possession lenders with some food for thought.
In March of this year, four former non-unionized employees of Canwest brought a motion in the Ontario Superior Court of Justice (the “Court”) for the appointment of representative counsel to protect the interests of themselves and similarly situated former employees in the Canwest Companies’ Creditors Arrangement Act (“CCAA”) restructuring proceedings.
Summary
The briefing provides an overview of the reorganisation plan introduced by the new Greek Bankruptcy Code. Its purpose is to set out the more important mechanics of the reorganisation plan and examine its more important ramifications within the bankruptcy process.
The new Greek Bankruptcy Code
Summary
In an exciting week for insolvency, the Minister for Financial Services, Superannuation and Corporate Law has released a package of reforms to Australia’s corporate insolvency laws. This reform package includes:
The insolvency of UK insurance companies is, fortunately, a fairly rare event. Even in the current difficult times - and despite speculation about the solvency of some insurers - we have yet to see a UK insurance company actually go into liquidation.