Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.
Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.
It is axiomatic – at least as a prima facie proposition – that insolvency is only concerned about assets which belong to the insolvent when the insolvency commences (or, as it is often said when a concursus creditorum is established on the commencement of insolvency). South African insolvency law respects property rights which have accrued under our law prior to the commencement of insolvency proceedings, including security interests such as mortgages, liens and cessions.
The South African economy has been significantly impacted by the Covid-19 pandemic. It is estimated that during the 2021 financial year alone, approximately four hundred companies were placed in business rescue. But what is business rescue and why is it relevant to small business owners and entrepreneurs in South Africa?
The Companies and Intellectual Property Commission (CIPC) issued a Business Rescue Proceedings Report (Business Rescue Report) on business rescue proceedings from its inception on 1 May 2011 to 31 December 2021 – a “ten-year” scorecard. It takes stock of how business rescue has developed over that period and whether South Africa has matured as a late entrant into the playing field of corporate restructuring regimes. The story must be told over the “ten-year” period and dissected into two parts: pre- and post-pandemic.
Chapter 6 of the Companies Act, 2008 affords a financially distressed company a fighting chance to restructure its financial obligations and avoid the destruction of value through liquidation for the duration of its formal chapter 6 business rescue proceedings. Such a moratorium is not available if a company seeks to conclude a restructure through a compromise or arrangement with all its creditors or members of any class of creditors.
In Shameeka Ien v. TransCare Corp., et al. (In re TransCareCorp.), Case No. 16-10407, Adv. P. No. 16-01033 (Bankr. S.D.N.Y. May 7, 2020) [D.I. 157], the Bankruptcy Court for the Southern District of New York recently refused to dismiss WARN Act claims against Patriarch Partners, LLC, private equity firm (“PE Firm“), and its owner, Lynn Tilton (“PE Owner“), resulting from the staggered chapter 7 bankruptcies of several portfolio companies, TransCare Corporation and its affiliates (collectively, the “Debtors“).
Joining three other bankruptcy courts, Judge Thuma of the District of New Mexico recently held that the rules issued by the Small Business Administration (“SBA“) that restrict bankrupt entities from participating in the Paycheck Protection Program (“PPP“) violated the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, P.L. 115-136 (the “CARES Act”), as well as section 525(a) of the Bankruptcy Code.
The Southern District of New York recently reminded us in In re Firestar Diamond, Inc., et al., Case No. 18-10509 (Bankr. S.D.N.Y. April 22, 2019) (SHL) [Dkt. No. 1482] that equitable principles in bankruptcy often do not match those outside of bankruptcy. Indeed, bankruptcy decisions often place emphasis on equality of treatment amongst all creditors and are less concerned with inequities to individual creditors.
On 21 April 2020, just over a week before the anticipated end of the South African national lockdown, President Cyril Ramaphosa announced further economic and social relief measures in response to the COVID-19 epidemic. This comes at a time when South Africa teeters towards a food and humanitarian crisis of “biblical proportions”.
