Introduction

For more than a century, a creditor holding English law governed debt relied on the principle (known as the “rule in Gibbs ”) that a debt governed by English law cannot be discharged by a foreign insolvency proceeding, provided that the creditor does not submit to that proceeding.

The High Court has sanctioned a scheme of arrangement between a Vietnamese company and certain of its creditors; the first time a Vietnamese company has taken advantage of this restructuring process in England.

Background

On 21 January, the Office of Fair Trading (“OFT”) announced that it would carry out a market study, supported by Ofwat, the UK water and sewerage regulator, looking at the market for treatment of organic waste. The study will look at whether the market is working effectively to deliver the best outcomes for customers. The OFT decided to launch this study after considering a proposal and request from Ofwat. The OFT will lead on the study and utilise its experience in conducting market studies and of the municipal, commercial and industrial organic waste sectors.

Summary

Almost a year to the day since the High Court rejected the Amigo loans group's previous proposal for a scheme of arrangement, on 23 May 2022, Mr Justice Trower sanctioned the group's latest scheme proposal which would create the conditions for the group to resume lending and resolve the claims of thousands of the group's customers arising from its lending practices.

On 26 March 2021, Mr Justice Zacaroli of the English High Court sanctioned a restructuring plan (the Plan) proposed by gategroup Guarantee Limited (Gategroup), following approval at two creditors' meetings convened pursuant to a judgment handed down by Mr Justice Zacaroli on 17 February 2021.

On 20 May 2020, the UK government announced the Corporate Insolvency and Governance Bill (the “Bill”), introducing a mixture of permanent and temporary measures, the latter being in response to the financial challenges companies are facing as a result of the Covid-19 pandemic and lockdown. In the absence of extensive consultation with insolvency practitioners and industry experts, it remains to be seen how effective the measures will be in practice.

The government has published its response to the consultation on insolvency and corporate governance. The document sets out its proposed next steps; in some areas the government will legislate but in other areas further consultation will be needed.

The proposed insolvency reforms include

• the introduction of a new moratorium to give ultimately viable financially distressed companies a period of time when creditors (including secured creditors) cannot take action against the company, allowing it to make preparations to restructure or seek new investment;

In the recent case of Lau Siu Hung v. Krzystof Marszalek (HCCW 484/2009, 17 June 2013) the Court of First Instance held that an annulment of bankruptcy does not debar a creditor, who has not proved his provable debt, from asserting his claim after the annulment.

Procedural Background

Release provisions

The scope of the powers afforded to the security agent by the so called “release provisions” found in many intercreditor agreements employed in LBO deals has come under scrutiny recently. A number of restructurings have relied upon using the security agent’s powers to implement a restructuring and many others will have at least considered using them.

In its recent consultation (“Managing the failure of systematic Digital Settlement Asset (including stablecoin) firms”), the Government has proposed that one of two special administration regimes (SARs) which currently apply to certain financial institutions (the Financial Market Infrastructure Special Administration Regime (FMI SAR) or the Payment and E-Money Special Administ