Deciding the parameters of directors' personal liability for actions, or omissions, when a company continues to trade while it is or near insolvent requires a balance to be struck between allowing directors latitude to try to rescue the company and protecting the company's creditors.

Payment Orders were originally introduced in the CPC as a fast track route for creditors holding a financial instrument, such as a letter of credit or cheque, to obtain judgment against their debtor for what is a simple and indisputable debt. Payment Orders were rarely issued by the onshore UAE courts. In 2018, Cabinet Resolution No 57 of 2018 (the “2018 Cabinet Resolution”) significantly expanded the scope of application of Payment Orders by extending them to all admitted debts rather than simply those arising out of financial instruments only.

On 1 September 2017, Boart Longyear Limited (Boart), successfully implemented the reconstruction of its US law governed debt using Australian creditor schemes of arrangement (Schemes).

This is a landmark case that will influence Australian corporate reconstructions for years to come.

The case involved approval by the NSW Supreme Court and recognition by the US Bankrupcty Court under Chapter 15 of the US Bankruptcy Code, ensuring cross border effectiveness for the reconstruction.

Highlights