High Court Tightens Section 546(e) Safe Harbor for Securities Transaction Payments

Business Restructuring Review March/April 2019

In This Issue:

Bankruptcy Court in Chapter 15 Case Refuses to Extend Comity to Gibbs Rule in Enforcing Croatian Settlement Modifying English-Law Debt

In In re Agrokor d.d., 591 B.R. 163 (Bankr. S.D.N.Y. 2018), a chapter 15 case involving a Croatian company’s restructuring proceeding, the U.S. Bankruptcy Court for the Southern District of New York recognized and enforced a settlement agreement that restructured debt governed by English law. The court concluded that, under principles of comity, it would be appropriate to enforce the settlement agreement in the U.S., even though enforcement of the agreement would represent a refusal to extend comity to the Gibbs Rule, in accordance with which English courts have refused to enforce foreign court orders modifying or discharging English-law debt for more than a century. 

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Secured Lenders’ Interest Does Not Reach Reorganized Equity

In In re MPM Silicones, LLC, 2019 WL 121003 (S.D.N.Y. January 4, 2019), the U.S. District Court for the Southern District of New York recently affirmed a 2014 opinion by the U.S. Bankruptcy Court for the Southern District of New York in an intercreditor dispute that may impact the frequency and efficacy of cramdown in future contested plan confirmations under chapter 11 of the Bankruptcy Code.

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Subordination Agreement Barred Bankruptcy Discovery Concerning Senior Debt

In In re Argon Credit, LLC, 2019 WL 169315 (Bankr. N.D. Ill. Jan. 10, 2019), the U.S. Bankruptcy Court for the Northern District of Illinois ruled that, in accordance with section 510(a) of the Bankruptcy Code, a standby clause in a subordination agreement prevented a subordinated lender from conducting discovery concerning the senior lender’s claims. According to the court, the subordinated lender’s efforts to circumvent the clear terms of the subordination agreement by claiming that it was acting on behalf of the bankruptcy estate, or investigating the senior lender’s alleged fraud, were unavailing.

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Proposed UNCITRAL Model Law on Enterprise Group Insolvency

In December 2018, at its 54th session in Vienna, Working Group V (Insolvency Law) of the United Nations Commission on International Trade Law (UNCITRAL) discussed revisions to its Enterprise Group Insolvency: Draft Model Law (the "EGI Model Law") as well as the EGI Model Law’s Guide to Enactment.

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International Legislative Update: Italian Bankruptcy Reforms

On January 10, 2019, the Italian government approved the Code for Distress and Insolvency (Codice della Crisi d’Impresa e dell’Insolvenza—the "CDI") as part of Legislative Decree No. 14 of 2019, to replace the Italian Bankruptcy Law of 1942. With certain exceptions, the CDI will enter into force on August 14, 2020, unless amended by the Italian Parliament prior to the effective date.

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Jones Day ranked No. 1 in the 2019 Acritas U.S. Law Firm Brand Index, a report ranking the top law firm brands in the United States. This is the third consecutive year that Jones Day earned the top spot. According to Acritas, the brand index is "a reflection of which firms are uppermost in clients’ minds, whom they are most attracted to and [to] whom they are most likely to give their work."

Roger Dobson (Sydney) was named a "Leading Lawyer" in the field of "Restructuring and insolvency" in The Legal 500 Asia Pacific 2019.

Heather Lennox (Cleveland and New York), Ben Larkin (London), Bruce Bennett (Los Angeles and New York), and Corinne Ball (New York) have been recommended as "Leaders in Their Field" in the area of "Restructuring/Insolvency" or "Bankruptcy/Restructuring" by Chambers Global 2019.

Paul M. Green (Houston) has been named a "Texas Rising Star" for 2019 in the field of "Bankruptcy: Business" by Super Lawyers.

An article written by Charles M. Oellermann (Columbus) and Mark G. Douglas (New York) entitled "The Year in Bankruptcy: 2018" appeared in the March 2019 edition of the INSOL International News Update.

Jasper Berkenbosch (Amsterdam), Juan Ferré (Madrid), and Ben Larkin (London) were recognized in the field of "Restructuring/Insolvency" by Chambers Europe 2019.

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