Worldwide: Insolvency/Bankruptcy/Re-Structuring

David L. Zive and Jacob E. Trachtenberg examine the distressed note sale market from both buyer and seller perspectives, analyzing the legal and transactional frameworks that govern these complex transactions. The article provides practical guidance for navigating the current market landscape and understanding the key considerations in distressed debt transactions.

When sophisticated parties to a restructuring agreement provide that a fee is triggered if a debtor “raises, or “commits to raise” alternative financing, does the word “commits” require a binding contractual obligation or something less? The First Department addressed this very question in a recent decision entitled Aurelius Capital Master Ltd. v Hertz International Limited, 2026 NY Slip Op 05369 (1st Dept Sept. 22, 2026). The 4-1 decision affirmed a post-trial judgment of approximately $15.9 million in favor of holders of unsecured notes issued by a Hertz affiliate, holding that “commits to raise” encompasses significant affirmative steps toward securing alternative financing, even absent a binding agreement.

Chapter 11 debtors have multiple pathways to exit bankruptcy, including plan confirmation, asset sales, dismissal, or conversion to Chapter 7 liquidation. Understanding how these mechanisms interact and can be sequenced is essential for practitioners developing effective exit strategies. This practice note examines the legal and practical considerations associated with each exit pathway.

Delaware's new Uniform Assignment for Benefit of Creditors Act brings unprecedented transparency and structure to ABC proceedings, establishing mandatory distribution waterfalls, true assignee independence, and clear creditor rights. Trade creditors must understand the 30/90-day timeline, filing requirements, and how this streamlined alternative to bankruptcy affects their recovery prospects when Delaware-organized customers face insolvency.

In asset-backed lending, the strength of the secured lender's position is only as reliable as the collateral securing it and the lender's ability to realize upon that collateral in the event of borrower distress.

Celsius Network's bankruptcy estate has commenced thousands of avoidance actions against former customers to recover cryptocurrency withdrawn in the 90 days before filing.