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Legal Intelligence · Bankruptcy & Restructuring

Bankruptcy & Restructuring legal & regulatory updates

Briefly tracks bankruptcy & restructuring developments — court rulings, legislation, gazette notices, and regulatory updates — from courts and regulators. 58 updates tracked in the past 30 days, last updated 30 Oct.

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Legal News
India
Case Law

Supreme Court Section 7 IBC Threshold: Clarifies Prima Facie Default Standard

The Supreme Court has clarified that the threshold for admitting an insolvency petition under Section 7 of the IBC is a summary, prima facie assessment. Adjudicating authorities must determine if a default occurred based on documentary evidence and a preponderance of probabilities, not exact debt re

30 Oct
India
Case Law

NCLAT Sets Aside Insolvency Proceedings Against Polycab Over ₹2.78 Crore Dues

On Friday, the National Company Law Appellate Tribunal (NCLAT) in India set aside insolvency proceedings that had been initiated against cable and wire manufacturer Polycab India Limited concerning alleged operational dues of ₹2.78 crore. A bench comprising officiating chairperson Justice Yogesh Khanna and technical members Barun Mitra and Ajai Das Mehrotra allowed the appeal filed by Polycab’s suspended director, Bharat Ajay Jaisinghani, against the admission of an insolvency petition by Asier Metals Private Limited. The NCLAT, in its decision, held that the adjudicating authority, the National Company Law Tribunal (NCLT) Ahmedabad, had erroneously admitted the application under Section 9 of the Insolvency and Bankruptcy Code (IBC), consequently setting aside the admission order, the initiation of the Corporate Insolvency Resolution Process (CIRP), and all consequential orders, thereby releasing Polycab from the proceedings. This ruling by the NCLAT carries significant legal weight for practitioners and businesses operating under the IBC framework, as it reinforces the critical principle that the existence of a

30 Oct
United States
Legal News

Howrey LLP: Alternative Fee Bankruptcy Led to Dissolution

A 55-year-old Washington-based litigation powerhouse, specializing in antitrust and patent law, dissolved in March 2011 and subsequently entered bankruptcy after its strategic shift to contingency and alternative fee arrangements in the late 2000s failed to generate expected revenues, leading to cash shortages, lender concerns, and partner departures. This historical account, detailed in an Above the Law article, serves as a critical case study on the risks associated with innovative billing models in the legal industry. This event holds profound legal significance for law firms and practitioners, particularly those contemplating or utilizing alternative fee arrangements (AFAs). It vividly demonstrates that while AFAs can offer flexibility and client appeal, they carry substantial financial risks if not meticulously managed, especially when anticipated

29 Oct
India
Courtroom Update

Kerala High Court: Justice John Objects to Byju's Insolvency Listing

On Thursday, a division bench of the Kerala High Court experienced an unusual procedural issue when Justice Johnson John, the junior judge, expressed strong objection to the out-of-turn listing of a review petition related to Byju's insolvency proceedings, despite an earlier order explicitly scheduling it for November 6, leading to a split decision on whether to grant a stay. This incident highlights critical issues of judicial process, case management, and the integrity of court listings, particularly in high-stakes insolvency matters. It underscores the importance of adherence to procedural orders and transparency in court administration, which can impact litigant confidence and the perceived fairness of proceedings. For practitioners, it signals potential challenges in predicting case timelines and the need for vigilance regarding procedural irregularities, especially when dealing with complex corporate insolvency cases where timely hearings can be crucial. The matter involves insolvency proceedings against Think and Learn Private Limited (Byju's), indicating the application of India's Insolvency and Bankruptcy Code, 2016 (IBC). The case is before the Kerala High Court, a superior court in the Indian judicial hierarchy, exercising its writ jurisdiction and review powers. The specific procedural issue revolves around the court's inherent power to manage its docket and the sanctity of judicial orders regarding listing. The "division bench" structure is common in High Courts for hearing appeals and complex matters, and a "split decision" on a stay order means the matter will likely be referred to a larger bench or a different judge for resolution on that specific point. The review petition itself is a mechanism for a court to reconsider its own decision, typically on grounds of error apparent on the face of the record. The key parties involved are the Kerala High Court (specifically Justice Johnson John and another unnamed judge), Think and Learn Private Limited (Byju's), and Voizzit Technology, which is a creditor and the review petitioner. The outcome of the stay order is not yet reported, as the judges had divergent opinions. Attorneys involved in high-profile corporate insolvency cases, particularly those before High Courts, should meticulously track case listings and be prepared to address any procedural anomalies. This incident underscores the need for robust internal case management systems and potentially proactive communication with court registries to ensure adherence to scheduled hearing dates. Furthermore, practitioners should be aware that judicial disagreements on procedural matters, such as granting interim relief, can lead to delays or require further judicial intervention, impacting case strategy and client expectations. Practitioners should monitor how the court resolves the procedural dispute and the substantive review petition.

29 Oct
United States
Legal News

Weil Gotshal: Hires Davis Polk for Restructuring Counsel

In October 2026, Weil, Gotshal & Manges, a prominent law firm, hired a team of restructuring and firm merger lawyers from Davis Polk & Wardwell, including Davis Polk managing partner Neil Barr and restructuring partner Brian Resnick, following a series of partner exits and unsuccessful merger discussions with Willkie Farr & Gallagher. This strategic move comes as several senior partners, including New York dealmaker Michael Aiello and five other M&A lawyers, have departed Weil for other top-tier firms such as Cravath, Swaine & Moore; Simpson Thacher & Bartlett; Paul, Weiss, Rifkind, Wharton & Garrison; and Sullivan & Cromwell. This development signals significant internal challenges and strategic shifts within a major AmLaw 100 firm. The hiring of restructuring counsel, particularly those with expertise in firm mergers and potential wind-downs, indicates a critical juncture for the firm's future. For the broader legal industry, it highlights the intense competition for top legal talent, the pressures leading to partner departures, and the strategic considerations firms undertake to maintain stability and market position. The unsuccessful merger talks also underscore the complexities and difficulties inherent in large-scale law firm consolidations, even when faced with internal pressures. This situation unfolds within the highly competitive and often opaque business environment of large law firms, particularly in jurisdictions like New York, where many of these firms are headquartered. While not directly involving a court case or specific statute, the actions taken by Weil are governed by partnership agreements, professional responsibility rules (e.g., client notification requirements during partner transitions), and general corporate law principles applicable to professional service organizations. The movement of partners, especially high-profile dealmakers, often involves complex contractual obligations, though the excerpt does not detail these. The potential for a "wind-down" would involve intricate legal and financial processes, including client transitions, asset distribution, and liability management, all subject to regulatory oversight by state bar associations. The central firm is Weil, Gotshal & Manges, which is experiencing partner departures and has engaged restructuring counsel. The newly hired team includes Neil Barr and Brian Resnick from Davis Polk & Wardwell. Other firms mentioned as destinations for departing Weil partners include Cravath, Swaine & Moore; Simpson Thacher & Bartlett; Paul, Weiss, Rifkind, Wharton & Garrison; and Sullivan & Cromwell. Willkie Farr & Gallagher was the firm with whom Weil reportedly had unsuccessful merger discussions. Reuters is the primary source of this information, as reported by the ABA Journal. Legal professionals, especially those in firm management, M&A, or restructuring practices, should closely observe the developments at Weil, Gotshal & Manges. This situation serves as a case study in managing partner retention, strategic responses to market pressures, and the challenges of firm mergers. For partners considering lateral moves, it underscores the fluidity of the legal market and the strategic value of their practices. For clients, it highlights the importance of monitoring the stability of their legal counsel and understanding the implications of firm restructurings or partner departures on their ongoing matters. The outcome of this matter is not yet reported, but its progression will offer valuable lessons on law firm governance and resilience.

28 Oct
Kenya
Legal News

KUSCCO: 42 Properties Up for Auction Across Kenya in November

In Kenya, the Kenya Union of Savings and Credit Co-operatives (KUSCCO) Ltd, currently under liquidation, is scheduled to auction 42 properties across various counties in November as part of its asset disposal process. Watts Auctions will conduct these sales in three regional auctions: the first on November 11 for properties in Nairobi, Central Kenya, Kajiado, and the Mount Kenya region; the second on November 20 for Western Kenya, Nyanza, the Rift Valley, and Kisii regions; and the third on November 27 for the Coast region. The diverse portfolio includes vacant plots in areas like Kitengela and Komarock, residential properties such as a four-bedroom bungalow in Kajiado and an apartment in Kirichwa Gardens, Nairobi, as well as commercial assets like a motor vehicle workshop in Kisii and rental buildings in Kisumu. The notice indicates that some residential and commercial developments are incomplete, suggesting varying stages of construction and potential for investors. This event is a significant development in the liquidation of a major financial institution, impacting numerous stakeholders including creditors, members, and the broader real estate market. The scale and geographical spread of the properties being auctioned underscore the extent of KUSCCO's financial distress and the liquidator's efforts to realize assets to satisfy outstanding liabilities. For the real estate sector, this influx of properties could influence local market dynamics, potentially offering investment opportunities for developers and individual buyers. The liquidation process is governed by Kenya's Insolvency Act, 2015, which provides the legal framework for winding up companies, including the identification, realization, and distribution of assets to creditors. While the liquidator is not explicitly named in the excerpt, their role is central to managing the company's affairs and overseeing the asset disposal. The auction process itself is subject to general contract and property law principles, ensuring transparency and fair market practices. Given KUSCCO's nature as a union of SACCOs, the regulatory environment also involves the Sacco Societies Regulatory Authority (SASRA) and the Co-operative Societies Act, which govern the operations and oversight of cooperative financial institutions. Attorneys advising clients interested in participating in these auctions should emphasize the critical importance of thorough due diligence on the titles, physical condition, and any encumbrances associated with the properties, especially given the context of a liquidation sale. For creditors of KUSCCO, this auction represents a crucial step towards the potential recovery of their claims, and they should closely monitor the proceedings. Legal professionals involved in insolvency matters should note the practical strategies employed by liquidators, such as regional auctions, to efficiently dispose of geographically dispersed assets, and advise their clients on the implications of such large-scale asset sales.

28 Oct
Kenya
Courtroom Update

Nairobi High Court: Banda Homes Creditors Meeting November 2026 Confirmed

In Kenya, creditors of Banda Homes Limited are scheduled to hold a virtual meeting with the company's liquidator, Waithaka Ngaruiya, on November 17, 2026, as part of the ongoing insolvency proceedings that commenced in 2021 before the High Court in Nairobi. This meeting, requested by the liquidator and announced via a Kenya Gazette notice, marks another procedural step in the administration of Banda Homes Limited's affairs under liquidation. The insolvency case has been before the High Court in Nairobi since 2021, indicating a protracted process. While the meeting aims to allow creditors to engage with the liquidator on the proceedings, the published notice does not disclose the total amount owed to creditors, the current value of the company's assets, or the potential recovery available to those with claims against the firm. Furthermore, the specific agenda for the meeting and whether a distribution to creditors will occur are not specified. This meeting holds significant legal importance as it represents a statutory requirement for liquidators to engage with stakeholders and provides creditors with an opportunity to receive updates and potentially influence the direction of the liquidation. The four-year duration of the case highlights the inherent complexities and often lengthy timelines associated with corporate insolvencies, particularly within the real estate sector. For creditors, understanding the progress of asset realization and the liquidator's strategy is crucial for assessing their potential recovery. The entire insolvency process for Banda Homes Limited is governed by Kenya's Insolvency Act, 2015. This Act provides the comprehensive legal framework for corporate liquidation, including the appointment of liquidators, the conduct of creditors' meetings, the identification and realization of company assets, and the subsequent distribution of proceeds according to a statutory order of priority. Waithaka Ngaruiya's appointment as liquidator under Section 439 of the Insolvency Act confirms the legal basis for his role in managing the company's winding up. The High Court in Nairobi maintains supervisory jurisdiction over these proceedings, ensuring adherence to the Act's provisions. Attorneys representing creditors in insolvency cases should advise their clients on the critical importance of active participation in creditors' meetings to safeguard their interests and gain insights into the progress of asset recovery. The extended timeline of this particular case underscores that insolvency proceedings can be complex and time-consuming, necessitating sustained engagement from all parties. Practitioners must be well-versed in the procedural requirements of the Insolvency Act, particularly concerning liquidator appointments and the conduct of meetings, and be prepared to navigate situations where specific financial disclosures may not yet be available.

28 Oct
South Africa
Case Law

High Court: Standard Bank v Continental Trust Sequestration Granted for Time Request

On 28 October 2026, the High Court of South Africa, KwaZulu-Natal Division, Pietermaritzburg, granted a provisional sequestration order against the Trustees for the Time Being of Continental Trust, holding that the Trust's written request for time to pay constituted an act of insolvency. This ruling carries significant implications for insolvency practitioners and those advising trusts, as it broadens the interpretation of what constitutes an

28 Oct
United States
Legal News

Weil Gotshal: Partner Exodus Fuels Restructuring Rumors

Partners at Weil Gotshal & Manges, a prominent law firm, are reportedly "frantically sending résumés" to rival firms in the United States as the firm's leadership grapples with significant internal turmoil and potential restructuring options following failed merger talks. The excerpt details a period of intense crisis at Weil Gotshal & Manges, characterized by leadership meetings, the departure of several partners, and the firm's exploration of restructuring options with external counsel. Specifically, Weil's management committee met extensively, some members were already leaving, and the firm sought guidance from restructuring counsel at another firm. Davis Polk, which advised Weil Gotshal in recent failed merger talks, continues to advise the firm. The situation intensified after the merger talks collapsed, leading to further partner departures and the withdrawal of the firm's would-be incoming leader. This has resulted in widespread anxiety among partners, who are actively seeking positions at other firms like Sidley Austin, White & Case, and Simpson Thacher. This situation highlights the inherent volatility and competitive pressures within the top-tier legal market, even for established firms. For legal professionals, it underscores the importance of firm stability, leadership effectiveness, and strategic planning in an environment where talent mobility is high. For businesses, it serves as a reminder of the due diligence required when selecting legal counsel, as significant internal upheaval at a firm can impact client service, continuity, and the stability of legal teams handling critical matters. The involvement of restructuring counsel suggests the firm is exploring serious options to address its financial or operational challenges, which could range from strategic realignments to more drastic measures. While not a legal ruling, this event touches upon the business and regulatory aspects of law firm operations. Law firms, particularly large partnerships, operate under complex governance structures and are subject to ethical rules regarding client representation, conflicts of interest, and professional responsibility, especially during periods of transition or dissolution. The departure of partners, particularly those with significant client books, can trigger contractual obligations, partnership agreement clauses, and ethical considerations related to client notification and file transfer. The involvement of firms like Davis Polk as advisors underscores the specialized legal services required for corporate transactions, restructuring, and internal governance issues within the legal industry itself. The key parties involved are Weil Gotshal & Manges, its management committee and partners, Davis Polk as an advisor, and rival firms like Sidley Austin, White & Case, and Simpson Thacher as potential destinations for departing partners. The excerpt does not report any specific legal outcomes or rulings related to the firm's situation, but rather describes ongoing internal and market developments. Attorneys, whether partners or associates, should closely monitor the stability and strategic direction of their own firms and the broader legal market. This situation at Weil Gotshal & Manges serves as a stark reminder of the importance of professional networking and maintaining marketability. For clients, it emphasizes the need to engage in proactive communication with their legal teams during periods of firm instability to ensure continuity of service and to understand any potential impacts on ongoing matters. Firms themselves should review their partnership agreements, succession plans, and crisis management protocols to mitigate risks associated with partner departures and market shifts. The outcome of Weil Gotshal & Manges' internal deliberations and restructuring efforts is not yet reported.

27 Oct

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