In my most recent blog post, I provided some tips for creditors who find themselves in the Subchapter V arena. This is somewhat of a follow-up to that one. There is a general consensus that Subchapter V has been successful for debtors in smaller cases. The American Bankruptcy Institute recently commented that Subchapter V bankruptcies comprise nearly 30% of all Chapter 11 bankruptcy cases filed since enactment of the Small Business Reorganization Act (SBRA) in 2020.[1]  This is no surprise – the advantages that a Subchapter V brings are meaningful and often case dispositive relative to a ..read more

Last year we discussed the impact of funding insolvency litigation following the Supreme Court decision in PACAR where the court found that litigation funding agreements (LFAs) were damaged based agreements.  This meant that unless LFAs complied with the Damages Based Agreements Regulations 2013 (DBA Regulations), they were unenforceable.  Although concluding that the outcome of the decision was unlikely to be significant in the context of the insolvency market, because the majority of insolvency claims are assigned (and therefore are unaffected by this decision) – those claims that ..read more

As discussed in our prior blog entitled “New York’s Sovereign Debt Restructuring Proposals,”[1] three bills were introduced in the New York state legislature to overhaul the way sovereign debt restructurings are handled in New York.  Those bills sought to implement a comprehensive mechanism for restructuring sovereign debt, limit recovery on certain sovereign debt claims, and amend the champerty defense.  None of the bills advanced to a full vote during the 2023 legislative session and, therefore, failed.  Earlier this month, however, New York lawmakers led by Senator Gustavo R ..read more

As seen in the recent proliferation of bankruptcy cases seeking a structured dismissal or conversion after a successful sale, debtors constantly seek creative and efficient ways to wind up a case, including through a traditional plan of liquidation.  Yet, as discussed below, debtors must ensure that any proposed voting procedures for a plan comply with section 1126 of the Bankruptcy Code, or are at least supported by, or supportable with, prior precedent.  Otherwise, notwithstanding a debtor’s creativity and intent to further benefit a creditor class, such voting procedures will lik ..read more

Following our previous alert, in which we highlighted an issue with entries relating to registered security maintained at Companies House being incorrectly updated to indicate that they had in fact been discharged without the awareness of the relevant company or security holder, it appears that some (potentially all) unauthorised filings have been – or are in the process of being – corrected. Is this good news? Yes, but with some reservations. Our latest insight considers what the current position is, and the impact on insolvency practitioners and other third parties that rely on Compani ..read more

For those unfamilar with the various insolvency processes it is not always easy to differentiate between them. In our latest insight we have produced a quick guide to administration that explains the procedure, benefits and effect of administration on third parties, including employees, suppliers and landlords. Our quick guide also explains the administrator’s role and the purpose of administration, as well as providing an overview of the sale process and the impact that this has. This guide sits alongside our other quick guides that give an overview of: Corporate Moratoriums Restructuring P ..read more

Over the past week, reports have emerged about filings that have been made at Companies House marking a charge as satisfied, without the company’s or relevant lender’s knowledge. There were rumours last week, which were simply that, because Companies House had not publicly announced any issue, but, as we have seen over the weekend and is now widely reported in the news, it appears that there have been at least 800 erroneous filings. Our alert explains the possible impact that this could have on insolvency practitioners. Hopefully the situation will be resolved shortly but watch this space for ..read more

In our latest insight we look back at the key restructuring cases and events from last year in the United States, Asia-Pacific, and Australia and consider the outlook in 2024 for restructuring transactions as a whole.   This insight provides an overview of the US banking crisis involving Silicon Valley Bank and Signature Bank, the real estate crisis in China, and landmark rulings to come from Australia’s recent bankruptcy filings.  We also reflect on how we expect interest rates, inflation, geopolitical conflicts and political uncertainty to impact the restructuring market in the co ..read more

On 7th February 2024, Mr Justice Richards heard closing submissions in the English High Court for a contested sanction hearing for Aggregate Group’s Part 26A restructuring plan. This hearing presented one of the first opportunities to analyse how the Adler decision will affect restructuring plans going forward. Aggregate are a German real estate group whose plan proposes to restructure three classes of debt to extend the maturity of senior debts by two years and discharge junior debts. The group hope this plan will secure €190 million in new money, which will be used to recommence development ..read more

Changes are afoot to the statutory regime governing special administrations for regulated water companies (the SAR) following the publication of a suite of new legislation. Impact of the changes on pension trustees Further details of the changes are set out below, but perhaps the most significant change for creditors generally, and pension trustees in particular, is the update to the insolvency waterfall to allow for priority payment of government funds. In a nutshell, this means that any funds provided by the Secretary of State to the special administrator by way of loan or grant will be pai ..read more