Paul Muscutt was recently quoted in Car Dealer Magazine UK in an article covering the collapse of car finance litigation funder Woodville Consultants in a £330 million bankruptcy.
Paul and Crowell’s London Restructuring and Insolvency team have been appointed by Kroll Advisory in the administration of Woodville. The team first acted for a group of…
As more commercial tenants seek bankruptcy protection, the question of assuming or assigning their leases and what defaults need to be cured gets debated. Not all Circuits have decided these issues. The topic of non-monetary defaults seems to get the most attention.
In bankruptcy, assumption or rejection allows a debtor (tenant) to decide whether to keep or terminate unexpired, nonresidential real property leases to maximize business profitability. Assumption means the debtor continues the lease, curing all defaults. Rejection terminates the lease, allowing the debtor to walk away, with damages capped by statute.
Does a debtor/trustee have to cure a default relating to a “going dark” provision or cure other non-monetary defaults in a nonresidential real property lease to assume or assign (or to take other action with respect to) that lease under section 365 of the Bankruptcy Code?
Continue Reading You Don’t Have to Turn Back Time to Turn on the LightsAccording to reports, Saks Global Enterprises, a leader in luxury retail, is preparing to file for Chapter 11 bankruptcy protection imminently. Saks houses such iconic brands as Saks Fifth Avenue, Bergdorf Goodman, and Neiman Marcus. Despite a recent recapitalization, the filing by this iconic company should not be a surprise to those following the industry closely. Retail has continued to face increased costs due to tariffs, inflationary pressures, ballooning consumer debt, and the continued rise of e-commerce competitors (including the upstart Quince). Total debt throughout the Saks enterprise is said to exceed $6 billion. The filing, when it comes, will follow a year-end missed interest payment in respect of certain notes, a sure signal of restructuring activity to come.
For lenders, landlords, suppliers, and other creditors, early preparation for a bankruptcy filing, and taking decisive steps during any bankruptcy case, will be critical to protecting interests and maximizing recoveries.
Continue Reading Saks Global Enterprises Bankruptcy: What Creditors Need to Know NowIn response to the increased frequency of majority-backed debt restructuring transactions that have significantly disadvantaged minority debtholders, lenders in the syndicated loan market have increasingly turned to cooperation agreements among themselves as a means to mitigate the risk of exclusion from such deals. While often effective, this approach has been met with hostility from the…
Recent weeks have seen several headline-grabbing instances of alleged financial frauds, leading directly to the bankruptcies of the First Brands and Tricolor corporate enterprises. Both companies are alleged to have engaged in deceptive off-balance sheet financing and double-pledging of collateral, tumbling into bankruptcy after these issues came to light. While their lenders will have to seek their recourse in costly and lengthy bankruptcy proceedings, the cases serve as sobering reminders to lenders of the critical importance of vigilant oversight and the need for transparency into their borrowers’ activities in today’s active and complex lending environment.
Continue Reading Use of Field Exams and QOE Reports to Safeguard Lenders in Risky TimesWhile it’s not common for a lender to require an individual guaranty in order to extend commercial credit to an operating business[1], when such a requirement arises, the individual providing a guaranty should not take such a requirement lightly. If the guaranty is structured as a full recourse guaranty, it will create an obligation whereby the individual guarantor is responsible to repay the loan from his or her own personal assets. Individuals who convince themselves that a guaranty is just a lender formality and hope to rely on their relationship with their lender should a problem arise with the loan, may find their sense of comfort to be misplaced. A recent decision from the Southern District of New York serves as a reminder that well-drafted guarantees can and will be enforced.
In White Oak Glob. Advisors LLC v. Clarke, No. 24-CV-2128 (JSR), 2025 WL 2113436 (S.D.N.Y. July 29, 2025), Thomas and Ana Clarke (the “Clarkes”) each signed individual guarantees in favor of White Oak Global Advisors LLC (“White Oak”) in connection with loans that White Oak made to businesses indirectly owned by the Clarkes. The loans matured in 2023 and a total of over $200 million was outstanding at maturity. The parties agreed in the guaranty documents that the maximum liability of each guarantor under their respective guarantees was to be capped at $20 million per guarantor. The underlying dispute focused on whether the guarantees were applicable to a promissory note (the “Note”) that had been amended and restated numerous times and if so, whether the guarantees were unconscionable.
Continue Reading Personal Guarantees: When a “Formality” Becomes a $20 Million RealityThe Information Sharing (Disclosure by the Registrar) Regulations 2024 (the “Regulations“) came into force in December 2024. The Regulations enhance insolvency practitioners (including the Official Receiver) (“IPs“) powers of investigation by providing them with greater access to information held by Companies House.
Continue Reading New UK Regulations Enhance Insolvency Practitioners’ Access to Data held by Companies House2024 brought a number of headline stories that will impact the bankruptcy and restructuring market in 2025 and beyond. A few of those are summarized below.
LMEs (Of course). Liability management exercises — sometimes referred to as “lender-on-lender violence” — continued on their growth trajectory during 2024, with restructuring advisors looking for (and finding) gaps in credit documents that allow for the practice. While uptiers, drop-downs and double-dips were all the talk of the first 364 days of the year, the Fifth Circuit’s ruling in Serta coming on December 31st closed out the year with a bang (or a thud). The Circuit Court reversed former Bankruptcy Judge David Jones’ ruling which had blessed Serta’s uptier transaction (allowing the majority lenders to leapfrog the non-participating lenders). Judge Jones’ original decision, coming from a prominent jurisdiction (Southern District of Texas) was a “stamp of approval” for many uptier transactions that came before and that followed. Among other things, the District Court found that the exchange of existing debt for newly issued senior debt did not constitute an “open market purchase” because it was not made available to all lenders. The District Court further remanded to the Bankruptcy Court the question of whether the excluded lenders had valid counter-claims (breach of contract, etc.) against the participating lenders and the borrower. The court further stripped certain indemnification provisions that had been included in the plan to protect against such a ruling. This brand new decision will likely have a dramatic impact on the feasibility of future LME transactions (at least until the drafting catches up). Others transactions that do not rely on open market purchases (J.Crew, for example) will be less impacted by the ruling.
Continue Reading Bankruptcy and Restructuring in the US: A Snapshot of 2024After a pause in 2022, there has been much talk of the continuation, or resumption, of a wave of retail bankruptcy cases as we begin 2023. 2022 was highlighted by Revlon’s filing (discussed here: Revlon May Signal Another Wave of Retail Bankruptcies | Retail & Consumer Products Law Observer (retailconsumerproductslaw.com)). Revlon pointed to a number of issues that led to its filing, including most prominently, supply chain issues. Severe impediments in the supply chain – whether the inability to source product or the costs and delays in received goods — have been cited by many debtors since Revlon since as a leading cause of their distress. And it may get much worse before it gets better, particularly for companies that source, directly or indirectly, from China.
Continue Reading Continued Pain in the Retail Sector: Coming Enforcement of Forced Labor LawsChapter 15 of the Bankruptcy Code provides a mechanism for United States cooperation and coordination with insolvency proceedings abroad, often affording foreign debtors wide-ranging relief and expansive rights through the United States Bankruptcy Court system. Not all proceedings in foreign jurisdictions are eligible — in order to be so, a proceeding must constitute a “foreign proceeding” under the Bankruptcy Code. The Bankruptcy Code defines a “foreign proceeding” as “a collective judicial or administrative proceeding in a foreign country… under a law relating to insolvency or adjustment of debt in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation.” It is generally understood that the definition should be interpreted liberally. Recently, the Bankruptcy Court for the Southern District of New York tested the limits of Chapter 15, providing important guidance regarding the eligibility of proceedings that do not involve “insolvency or the identification, classification, or satisfaction of debt.” See In re Global Cord Blood Corporation, Case No. 22-11347 (December 5, 2022).
Continue Reading A Line in the Sand: Caymans Proceeding Ineligible for Chapter 15By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.
