Australia’s new ipso facto regime is now in effect. It stays the enforcement of contractual rights triggered upon the entry of a corporate counterparty into certain restructuring and insolvency processes. The regime will affect a broad range of contracts entered into on or after 1 July 2018; however, certain contracts and contractual rights have been excluded from the operation of the stay pursuant to statutory instruments which have just been issued.
On 16 April 2018, the Australian Federal Government (Government) launched a public consultation on proposed exceptions to the recently enacted stay on ipso facto clauses. These exceptions, which will be contained in a forthcoming declaration and regulations, will be critical to the operation of the new ipso facto regime, and its impact on stakeholders.
In the first judgment under Singapore’s new ‘super priority’ DIP financing regime, the Singapore High Court declined to grant priority status to funds to be advanced to the Attilan Group.
The Singapore regime is the first to import US Chapter 11-style DIP priority funding mechanisms into a jurisdiction with primarily English-law based corporate law and insolvency regimes.
The judgment discusses how Singapore provisions align with established principles under US Bankruptcy Code provisions and case law.
The English High Court has sanctioned a scheme of arrangement for Algeco Scotsman PIK SA, a Luxembourg-incorporated company, after the creditors consented to the New York governing law and jurisdiction clause being altered in favour of the jurisdiction of the English courts. The issues discussed were:
- the fair representation of a class of creditors;
- cross-jurisdictional schemes; and
- early tender fees offered to creditors.
Background
UK lawyers and restructuring professionals have been highlighting their concerns for British business and Financial Markets if the Government is unable to negotiate a bespoke treaty between the UK and the EU to preserve the mutual and reciprocal recognition provisions written into the Recast EU Insolvency Regulation (Recast EIR) and the Recast Brussels Regulation (the Judgements Regulation) after Brexit in 2019.
In a corporate world where the capital structures of companies are becoming increasingly complex, schemes of arrangements under the Companies Act 2006 have established themselves as the restructuring procedure of choice for many distressed companies. This popularity is evidenced by the fact that schemes of arrangement have been increasingly used by overseas companies wishing to restructure their debts under the flexibility offered by English law.
Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings comes into effect on 26 June 2017 for insolvency proceedings that are opened on or after that date. The Recast Regulation replaces the EC Regulation (1346/2000) on insolvency proceedings and has direct effect in the UK until such time as the UK leaves the EU.
The New South Wales Court of Appeal has, in a decision that has surprised many practitioners, dismissed an appeal which challenged the composition of classes in the creditors’ scheme of arrangement involving Boart Longyear Limited.1
In a recent landmark decision, Re Boart Longyear Limited [2017] NSWSC 567, the New South Wales Supreme Court granted orders to convene creditor meetings for two schemes of arrangement in respect of the restructuring plan of Boart Longyear Limited.
The Insolvency Rules (England and Wales) 2016 (“IR2016”) came into force on 6 April 2016 applying to most corporate and personal insolvency regimes in England and Wales. However, there is still unfinished business for the Government and further regulation is expected to be introduced later this year to ensure the changes apply uniformly in all areas.