Sometimes, disputes arise in connection with restructuring or bankruptcy. At DLA Piper, we focus first and foremost on being solution-oriented, identifying the best possible result for all parties, also in connection with bankruptcy proceedings before the
Insolvency and Restructuring
We advise many different types of clients being involved in litigation, including businesses denying liability, lenders, state-owned businesses, trustees in bankruptcy, capital owners, corporate managements and buyers of/investors in debts and assets in distressed companies.
Is litigation the best solution?
Not necessarily. In some cases, the problems arising in connection with restructuring and bankruptcy can be solved more quickly by other methods, such as negotiation or mediation. As advisors, we strive to identify the most value-enhancing solution for the parties involved. Therefore, we always assess situations on their own merits. At DLA Piper, we have lawyers who are authorised mediators.
Bankruptcy litigation
Unfortunately, litigation cannot always be avoided. In that case, we act on behalf of our clients in connection with:
- Investigations, court proceedings and enforcement in connection with bankruptcy proceedings
- Litigation concerning disqualification
- Litigation concerning economic crime
- Litigation concerning avoidance and actions for damages concerning management liability
In case of bankruptcy, the bankruptcy court appoints a person to be in charge of the administration of the bankruptcy estate and safeguard the creditors' interests. That person is called the trustee in bankruptcy. Normally, the person appointed by the bankruptcy court is a lawyer. DLA Piper's insolvency lawyers are often appointed as trustees.
A trustee in bankruptcy has many different duties. Generally, the trustee is in charge of selling the assets of the bankruptcy estate and distributing the proceeds between the creditors in accordance with the provisions of the Bankruptcy Act.
The trustee must also investigate whether some creditors have received preferential treatment in the period leading up to the bankruptcy. If so, some decisions and transactions will have to be reversed (avoided). For more information about avoidance claims, please see below.
Moreover, the trustee also investigates whether to bring actions for damages against the company's former management due to their decisions or transactions.
The trustee is also the one who investigates whether there are grounds for commencing disqualification proceedings against the company's former management. As a result of the serious financial collapses that took place in the wake of the financial crisis, the management and advisors of companies have increasingly become the focus of investigation in connection with bankruptcy cases.
Handling of avoidance claims
One of the duties of the trustee in bankruptcy is to investigate any potentially voidable transactions and, if necessary, commence avoidance proceedings. Our lawyers have vast experience of handling avoidance cases, both as trustees of the bankruptcy estates of small sole traders or large listed companies and as legal representatives of the creditors defending such claims.
We are able to assess the legal and commercial consequences of the claim for the parties involved and offer our recommendations and input as to whether the dispute should be resolved in court or through negotiations. We always seek to find the most value-enhancing solution for our clients, regardless of whether such solution is an out-of-court settlement or a lawsuit. A value-enhancing solution requires much more than just legal expertise.
