The Court of Appeal decision in Triple Point Technology Inc v PTT Public Company Ltd turns on the wording of that particular contract, but was, in part, unexpected.
This decision does not reflect the generally held view (prior to this case) that liquidated damages will be recoverable until the point of termination at least.
Background
It is little wonder why Andrew Tinkler’s removal from the Stobart Group (and subsequent court case) attracted so much media attention:
In April 2018, the United States Supreme Court approved rule changes to both the Federal Rules of Civil Procedure (the Civil Procedure Rules) and the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). The rule changes became effective on December 1, 2018. While the modifications are not as monumental as those made in previous years, one set of changes, focusing on electronic service, will certainly impact the day-to-day practice for bankruptcy professionals.
What Is the "Rule in Gibbs"?
The rule in Gibbs is a long-established common law principle in which the Court of Appeal determined that a debt governed by English law cannot be discharged or compromised by a foreign insolvency proceeding(Anthony Gibbs and Sons v La Société Industrielle et Commerciale des Métaux (1890) 25 QBD 399). The rule in Gibbs remains a fundamental tenet of English insolvency law.
Why Does the Rule in Gibbs Matter?
The UK government announced on 26 August 2018 that it will legislate to update the restructuring and insolvency systems, with the aim of the UK retaining the gold standard regime. The reforms are a response to international developments (with countries such as Spain and the Netherlands recently introducing updated insolvency systems) and some domestic corporate collapses which have put the UK system under stress.
The reforms are wide-ranging. Headline changes will include:
The UK and the US have historically been perceived as leading jurisdictions in the development of restructuring and insolvency law – to the extent that dozens of local insolvency regimes around the world have been modelled on some combination of their processes. Both regimes are highly sophisticated, and feature well-developed legislation supported by decades of case law that offers both debtors and creditors alike a degree of certainty and predictability that is not always available in other jurisdictions.
Cambridge Analytica, the data analytics firm at the centre of the Facebook data scandal, is closing its doors and commencing insolvency proceedings. The company has been unable to recover from the bad press coverage and large legal fees in dealing with the aftermath of the Facebook data breach allegations.
Judge Martin Glenn granted recognition to a UK scheme of arrangement with third-party releases that lacked full creditor consent. In re Avanti Communs. Grp., PLC, No. 18-10458, 2018 Bankr. LEXIS 1078 (Bankr. S.D.N.Y. Apr. 9, 2018). While stating that “granting third-party releases in chapter 11 cases is controversial,” Judge Glenn noted that courts will more willingly enforce third-party releases in chapter 15 cases, given the importance of comity and respect for foreign proceedings.
Background
Avanti Communications Group PLC ("Avanti") are a satellite operator headquartered in London, with subsidiaries across Europe and Africa, providing fixed satellite services in Europe, the Middle East and Africa.
Avanti had issued Senior Secured Notes maturing in 2021 and 2023 and had borrowed under a senior term loan. Due to delays associated with two of Avanti's satellites, Avanti experienced financial difficulties, with a materially over-leveraged capital structure.
On the morning that Mothercare announced its CVA, its share price went up by 35% (from 20p to 27p) and now sits at 35p (up 75%) from the price the day before the CVA was launched.