Archives: Cross-Border Insolvency & Restructuring

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Take special care – amendments to the Special Administration Regime

On 6 April 2017, together with the new Insolvency Rules (England and Wales) 2016, the Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017 (the “Regulations”) will come into force. These regulations follow an independent review of the special administration regime, undertaken by Peter Bloxham during 2013, assessing the success of the special … Continue Reading

What is half of nothing? Wrongful trading developments in the ‘Robin Hood’ case

Case law on wrongful trading has developed significantly over the past two years, with the cases of Ralls Builders and Brooks increasing judicial consideration of the conduct of directors in the period preceding an insolvency. The judgment of the appeal and cross-appeal in Brooks was handed down in late 2016. It provides an essential update … Continue Reading

Amendment of Core Payment Terms Only: Second Circuit Court of Appeals reverses the Marblegate challenge to Section 316(b) of Trust Indenture Act 1939

Restructuring lawyers and distressed companies alike were granted welcome relief by the US Second Circuit Court of Appeals when it overturned the decision of the District Court in the case of Marblegate Asset Management, LLC v Education Management Finance Corp.[1] In 2014, Education Management Finance Corp. (“EDMC”) sought to restructure its debts outside of a … Continue Reading

Watershed Ruling in U.S. Rejects OW Bunker’s Maritime Lien Claims

In a watershed decision concerning the scope of maritime liens under the U.S. Commercial Instruments and Maritime Lien Act (“CIMLA”), the District Court for the Southern District of New York recently held that OW Bunker entities did not have valid maritime liens for the supply of bunkers to vessels. In the first decision by a … Continue Reading

Concerned about a going concern? New standards on accounting standards

Following on from our recent blog post on Ralls Builders Limited (in liquidation) [2016] EWHC 243 (Ch), in which Mr Justice Snowdon discussed the issues around wrongful trading under section 214 of the Insolvency Act 1986 and the quantum of liability that may be placed on directors who continue to trade when they knew, or … Continue Reading

Ralls Builders Limited Clarification

In February 2016, Mr Justice Snowden handed down his judgment in the High Court proceedings concerning Ralls Builders Limited (in liquidation) [2016] EWHC 243 (Ch). This matter concerned an application by the liquidators of Ralls Builders Limited (in liquidation) (the company) for a declaration regarding the alleged wrongful trading of the company by its directors, … Continue Reading

Modeling the Model Law – what not to do

OGX Petroleo E Gas S.A., Re [2016] EWHC 25 (Ch) In a recent judgment, Mr Justice Snowden sounded a cautionary note for applicants seeking recognition of a foreign insolvency proceeding under the UNCITRAL Model Law, advising applicants to make full and frank disclosure to the court in relation to the effect that such recognition might … Continue Reading

To submit or not to submit – questions of jurisdiction

This appeal arose out of the litigation fallout from the Bernard Madoff Ponzi scheme. In the appeal, the Privy Council considered whether, at common law, an agreement to submit to jurisdiction must be express or whether it could be implied or inferred. The Board of the Privy Council found that an agreement to submit to … Continue Reading

COMI and get it: international approaches to cross-border insolvencies

In our increasingly global world, cross-border insolvencies have become relatively commonplace. Lehman Brothers and Nortel Networks are just two of the matters where parallel proceedings in multiple jurisdictions were necessary in order to effectively administer the debtors’ estates. Neither the Regulation nor the Model Law seek to address or harmonise the substantive differences among insolvency … Continue Reading

Further Changes to French Corporate and Insolvency Legislation

In this article, Anker Sorensen, a partner of the Financial Industry Group of the Paris office of Reed Smith LLP, practicing predominantly in the area of corporate and restructuring, shortly describes and comments the main changes which have been introduced by the “Macron law” in the insolvency/corporate restructuring area, i.e.: the specialization of commercial courts … Continue Reading

French Supreme Court rules out liability for undercapitalising companies

In this article, Anker Sorensen, a senior partner of the Financial Industry Group of Reed Smith in Paris, practicing predominantly in the area of Corporate and Restructuring, discusses two recent decisions rendered by the Commercial chamber of the French Supreme Court. One of the decisions seems to set a standard for the lower courts when … Continue Reading

Courts in New York and Singapore reach opposite conclusions on the validity of interpleader applications arising out of the OW Bunker bankruptcy

On 7 November 2014, OW Bunker A/S (“OW”), a global supplier and trader of marine fuel, filed for bankruptcy in Denmark. Further bankruptcies of OW subsidiaries and affiliates swiftly followed, including the bankruptcy of certain U.S. and Singapore-based OW entities. Protective interpleader proceedings were brought in the U.S. and Singapore by vessel owners and charterers who … Continue Reading

Schemes of Arrangement for Distressed Shipping Companies – a viable (and cheaper) alternative to chapter 11?

While it is clear that chapter 11 of the U.S. Bankruptcy Code can be an effective tool of reorganisation for distressed foreign shipping companies that are locked in an adversarial dispute with their creditors, should an English scheme of arrangement be considered as an alternative to a U.S. bankruptcy case for shipping companies that are … Continue Reading

Provisions of The Small Business, Enterprise and Employment Act now in force

We published a client alert in March, confirming that the Small Business, Enterprise and Employment Act 2015 (the “Act”) received Royal Assent on 26 March 2015 and summarising the provisions which will amend insolvency legislation. The provisions of the Act will come into force in stages over the next year, but a number of provisions, including … Continue Reading

Oil Price Decline: Positioning for Turnaround or Sale

As a reaction to the dramatic oil price volatility, many energy companies plan to streamline operations by reducing work force and shedding assets. Those who do so face tightening credit and decline in asset value that may impact the solvency of the business enterprise. Energy companies must maintain operations where possible to preserve value and … Continue Reading

February Newsletter

Reed Smith’s global Commercial Restructuring & Bankruptcy team have recently published the February Edition of their quarterly newsletter. The newsletter provides a detailed review of some of the most important legal developments in the sector.  The February issue includes the following: Minority Holders Gain Leverage Through Recent Interpretation of Trust Indenture Act New Jersey Joins Number … Continue Reading

Storms gathering for restructuring of group entities underscore need for up-to-date advice

In this article, the author Anker Sorensen, a senior partner of the Financial Industry Group of Reed Smith Paris, practising predominantly in the area of Corporate and Restructuring, sets out various recent labor related reforms applicable in France in 2014 and discusses recent court decisions, which may deter investors, and particularly foreign investors, instead of … Continue Reading

Privy Council hands down judgment in PwC v Saad Investments Company and Singularis Holdings v PwC

This post was written by Monika Kuzelova and Colin Cochrane. Singularis Holdings Limited v PricewaterhouseCoopers [2014] UKPC 36 PricewaterhouseCoopers v Saad Investments Company Limited [2014] UKPC 35 The Privy Council gives credence to the concept of “modified universalism” (being the court’s common law power to assist foreign winding up proceedings) and notes some of the circumstances which … Continue Reading

October Newsletter

Reed Smith’s global Commercial Restructuring & Bankruptcy team have recently published the October Edition  of their quarterly newsletter.  The newsletter provides a detailed review of some of the most important legal developments in the sector.  The October edition covers diverse areas from the use of schemes of arrangements in England to attorney-client privilege issues in … Continue Reading

Welcome to Reed Smith’s Global Restructuring Watch Blog

If you’re reading this, you understand the necessity of keeping up-to-date on global restructuring trends and developments. Reed Smith’s global restructuring group is known worldwide as one of the premier practices focusing on complex financial restructurings, workouts, bankruptcies, insolvencies and other matters involving financially distressed transactions. We represent clients in the United States, the United … Continue Reading

Madoff Trustee’s Clawback Reach Cut Short

Foreign investors who are concerned about the extraterritorial application of U.S. bankruptcy law can draw some comfort from a recent decision in the liquidation case of Bernard L. Madoff Investment Securities (“BLMIS”).  On July 6, 2014, United States District Court Judge Jed S. Rakoff ruled that the BLMIS Trustee could not use the Bankruptcy Code’s … Continue Reading
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