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The Egyptian cabinet yesterday approved the country's first bankruptcy law, Justice Minister Hossam Abdelrahim said, part of an economic reform drive aimed at encouraging investment, Reuters reported. The law aims to minimize the need for companies or individuals to resort to the courts and will simplify post-bankruptcy procedures, Abdelrahim said, adding that the measure would also abolish imprisonment in cases of bankruptcy. Until now, Egypt has had no specific law on bankruptcy, meaning failed companies have had to go to court on a case-by-case basis. Egypt is in the process of passing a long-awaited investment law aimed at reviving the economy and attracting foreign investors.

A subsidiary of cocoa-trading house Transmar Group, which supplies Hershey Co., Nestlé SA and other big chocolate makers, has filed for bankruptcy protection, blaming its financial problems partly on the U.K. vote to exit from the European Union, the Wall Street Journal reported today. Transmar Commodity Group Ltd., the company’s U.S. arm, filed for chapter 11 on Saturday to restructure debts of more than $413 million, court papers say. The company’s financial woes flow primarily from wrong-way bets on the price of cocoa made by the Transmar Group’s troubled European operation, Euromar Commodities GmbH, according to Deloitte’s Robert Frezza in a declaration filed with the bankruptcy court. Mr. Frezza was retained by Transmar Commodity Group to serve as the company’s chief restructuring officer.

The failed taxi-booking app Karhoo, a London-based startup that once planned to be in 400 cities by the end of 2020, has filed for bankruptcy protection, the Wall Street Journal reported today. The Karhoo app, which let customers to compare cab fares on smartphones before booking a ride, faces a collection lawsuit in New York and risks losing some of its more than 700 contracts with taxi fleet owners and dispatchers. Karhoo officials who found a buyer for the company’s blueprints are asking a U.S. bankruptcy judge to halt lawsuit and protect the contracts until the deal is completed. Founded in November 2014 by entrepreneur Daniel Ishag, Karhoo ran out of money after expanding from London to nine other English cities, Paris and Singapore. Karhoo’s board decided on Nov. 7 to pull the plug on operations, laying off its roughly 200 workers who are still waiting to collect nearly $1.9 million in wages, according to documents filed in U.S. Bankruptcy Court in New York.

Modular Space Corp. has filed for protection from creditors in the U.S. and Canada, to implement a plan to rework its $1 billion load of long-term debt, the Wall Street Journal reported today. Business will continue as usual during what is expected to be a brief bankruptcy stay for ModSpace, which makes, leases and sells office trailers, mobile offices, temporary classrooms, modular office complexes and portable storage units. A restructuring that will cut into the debt load by swapping out about $400 million worth of debt for equity was negotiated in advance of the bankruptcy filing in the U.S. and the initiation of Canadian restructuring proceedings in Toronto. ModSpace launched workout talks after a $1.75 billion merger with Williams Scotsman International Inc. fell through in August, after some backers dropped out to cope with the effects of Britain’s exit from the European union, court papers say.

Wracked by instability in Ukraine, a private energy giant owned by one of the Eastern European county’s wealthiest men is seeking a U.S. bankruptcy court’s assistance to execute a debt restructuring scheme developed overseas, the Wall Street Journal reported today. An affiliate of DTEK BV, Ukraine’s largest privately held energy company, filed papers in the U.S. Bankruptcy Court in New York on Friday seeking chapter 15 protection. DTEK’s sole shareholder is billionaire Rinat Akhmetov, who controls it through his System Capital Management investment firm, court papers say. A onetime financial backer of exiled former Ukrainian President Yanukovych’s Party of Regions, Akhmetov’s business empire has been tested by the political tumult in Ukraine since the 2014 political revolution there that toppled his longtime ally. Many of the major industrial assets owned by Akhmetov are located in eastern Ukraine near the conflict zone. The energy group, which owes roughly $2.17 billion in debt mostly denominated in U.S. dollars, euros and Russian rubles, operates a vertical production chain to serve residential, public sector and industrial end-users in Ukraine.

A leading U.S. subsidiary of Abengoa SA received U.S. court approval to exit its chapter 11 bankruptcy, according to court records filed yesterday, putting the Spanish renewable energy group closer to achieving a global debt-cutting plan, Reuters reported. Abeinsa Holding Inc. was one of dozens of U.S. Abengoa subsidiaries that filed for U.S. bankruptcy protection while the Seville-based parent worked out a high-stakes plan to cut $10 billion of debt and avoid its own bankruptcy in Spain. Under Abengoa's master restructuring agreement, big bank lenders such as Santander will take equity in exchange for debt in the family-founded engineering company that invested heavily to finance a quick expansion in global renewable energy. As part of the U.S. reorganization, Abengoa will retain its control of the U.S. businesses, which range from engineering and construction firms to biofuel and solar energy plants, thanks to a $23 million cash payment by its new bank owners. Abengoa will also put funds into a litigation trust to resolve potential lawsuits and a separate reserve pool for potential insurer claims. Read more. 

To read more about litigation or liquidation trusts in bankruptcy, be sure to pick up a copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts.

Bankruptcy Judge John Sherwood ruled yesterday South Korea’s Hanjin Shipping Co. must answer to U.S. creditors by publicly disclosing all of its U.S.-based assets as well as any cash that has been transferred out of the country, the Wall Street Journal reported today. Judge Sherwood ordered that the disclosures in response to a plea from American creditors who say they are being treated unfairly. The judge also said that he would grant final approval of a host of legal protections that have helped the shipper, once one of the world’s largest, jump-start stalled supply lines. The decision, which some creditors opposed, affirms the New Jersey court’s September ruling that formally recognized the Hanjin’s bankruptcy proceeding in Korea, bringing the shipper under the umbrella of U.S. bankruptcy law. Judge Sherwood’s order imposes strict prohibitions on U.S. creditors that prevent them from seizing ships and other assets without first going to the bankruptcy court.