The Supreme Court in Sevilleja v Marex Financial Ltd [2020] UKSC 31 has brought much needed clarity to the legal basis and scope of the so-called ‘reflective loss’ principle. The effect of the decision is a ‘bright line’ rule that bars claims by shareholders for loss in value of their shares arising as a consequence of the company having suffered loss, in respect of which the company has a cause of action against the same wrong-doer.
The Finance Act 2020 received Royal Assent today (22 July), confirming the anticipated but opposed intention to restore HMRC as a secondary preferential creditor on insolvency.
From 1 December 2020 HMRC’s claim will sit ahead of floating charge holders and unsecured creditors reducing the monies available for distribution to both when a corporate files for insolvency.
On 25 June 2020 the Corporate Insolvency and Governance Act received Royal Assent, making some of the biggest changes to UK insolvency laws in the last 30 years. We have written several blogs covering the changes and how they help support distressed businesses, impact suppliers, lenders and other third parties and have tracked the changes through the UK parliament.
The High Court, in Quinn v Toon [2020] NZHC 816, confirmed that only the reasonable costs of the liquidators will be recoverable.
Ms Toon applied for orders under ss 276 and 278 of the Companies Act 1993 to approve her remuneration claiming $101,729 plus GST and expenses for her work as the liquidator of Investacorp Holdings Ltd.
This was a solvent liquidation. While there were no creditors, there were disputes between shareholders that Ms Toon spent a considerable amount of time investigating.
In our December 2019 newsletter we commented that the Madoff bankruptcy had one more big case to go, chasing USD3.2b held by foreign banks. The US Supreme Court has just refused to hear an application by major banks and companies, including Koch Industries Inc, to prevent Mr Picard, the bankruptcy trustee, from pursuing claims aimed at recouping funds that were transferred overseas. In the meantime, Mr Madoff has been refused early
A Singaporean Court in Anan Group (Singapore) PTE Ltd v VTB Bank (Public Joint Stock Company) [2020] SGCA 33 has recently confirmed the Court’s approach in assessing arbitration clauses when an application has been brought to put a company into liquidation.
The parties in this case are parties to an arbitration agreement. The respondent applied to put the appellant into liquidation. The Court considered that the winding up proceeding should be stayed with the underlying dispute to be resolved through arbitration.
The English High Court ruled that prospective emergency legislation to amend insolvency laws due to the COVID-19 pandemic could not prevent liquidation proceedings from being brought. In Shorts Gardens LLP v London Borough of Camden Council [2020] EWHC 1001 (Ch) applications were made by two companies to restrain local councils from bringing liquidation proceedings in respect of unpaid rates and costs orders.
In our April newsletter, we noted that the UK Government had announced proposed changes to insolvency laws. On 20 May 2020, the Corporate Insolvency and Governance Bill (UK) was introduced. The proposed reforms include:
The Government has passed an omnibus bill which introduced amendments that will assist New Zealand to respond to the wide-ranging effects of COVID-19.
In brief the changes to insolvency legislation are:
In Re A Company (injunction to restrain presentation of petition) [2020] EWHC 1406 (Ch), the Court held that it is able to take into account the likelihood of a change in the relevant law in deciding whether to restrain a winding up application from being brought.