The Collapse Of Coal
Supreme Court of Gibraltar recognises United States Chapter 11 bankruptcy proceedings as a foreign main proceeding.
Canadian insolvency proceedings of Pacific Exploration & Production Corporation recognised as main proceedings by Colombia and US Bankruptcy Court
Pacific Exploration & Production Corporation ("the Company"), a Canadian public company who explore and produce natural gas and crude oil with operations focused in Latin America. In April 2016, the Company obtained an initial order from the Ontario Superior Court for protection under the Companies' Creditors Arrangement Act for the restructuring of the Company.
Chinese Metals Producer Goes Bankrupt
Guangxi Nonferrous Metals Group ("Guangxi"), a Chinese state-owned organisation, entered into bankruptcy a few days ago. Guangxi's business was mineral exploration and mining development, an industry which has suffered in recent years due to the economic shift taking place in China as the building industry slows it pace. Guangxi defaulted on its bonds and payments and then failed to propose a reorganisation plan within six months as ordered by the Court. The bankruptcy is of note because it involves 108 creditors and, as Chinese publication Caixin reports, Guangxi is the first state-owned organisation to have defaulted in the "highly liquid interbank bond market". It is anticipated that there may be further defaults on Chinese bonds in the coming years, as the economy adjusts to cope with industrial overcapacity.
Payment of Tuition Fees Is Not Fraudulent Avoidance - Massachusetts
In the recent judgment of DeGiacomo v Sacred Heart University, Inc. (In re Palladino) in Massachusetts, a bankruptcy trustee tried unsuccessfully to reclaim tuition fees paid by the bankrupts to Sacred Heart University for their child's education. The trustee's argument was that the $65,000 transfer was fraudulent, because the bankrupts were not legally required to pay these tuition fees under state law and also because the emotional satisfaction that the bankrupts received by paying for their child's tuition did not amount to "value" for the purposes of defeating a fraudulent claim. The Court however disagreed, holding that a college degree would lead to financial self-sufficiency for the child, which would result in economic benefit for the bankrupts. The "value" was therefore existent and sufficient to defeat the claim of fraud. The trustee is now appealing this decision.
UAE New Insolvency Law
The UAE's new insolvency law is expected to receive final approval shortly and come into effect from early 2017. The new law creates mechanisms for insolvent companies to avoid going into a formal insolvency process and is modelled on international best practices, drawing on the insolvency regimes of several countries including Germany, France, the Netherlands and Japan. The new law will establish the Committee of Financial Restructuring as a regulatory body that will oversee the procedures of financial restructuring out of court, appoint experts in financial restructuring, and establish a database of individuals who have been made bankrupt. Using the new law, insolvent companies can work to avoid liquidation by financial reorganisation, a court-supervised pre-emptive settlement for licensed entities, a court-supervised financial restructuring process, or the raising of new funds. The law also introduces punishments such as for deliberately concealing financial losses and embezzlement.