The Supreme Court’s long-awaited decision in the Sequana case (handed down on 5 October 2022)[1] is the first time that the UK’s highest court has been asked to consider the proposition that directors are, in certain circumstances, under a duty in respect of creditors’ interests as distinct from shareholders’ interests.
The key takeaway points from this ‘momentous decision for company law’ (the words of Lady Arden who gave one of the leading judgments) are:
Summary
Restructuring Plans (“Plan(s)”) were introduced by the Corporate Insolvency and Governance Act 2020 (“CIGA”) as a rescue tool for companies in financial difficulty to compromise debt and other liabilities owed to secured and unsecured creditors and its members, with the court’s sanction.
Summary
The Insolvency Service has released its report on CVAs (the “Report”), which was commissioned in response to the significant concerns raised by the commercial property sector in recent years and the legal challenges launched by landlords against a number of CVAs.
We have written many times over the past few years about how the bankruptcy courts are off-limits to state-legalized cannabis businesses. This past year brought no new relief to the cannabis industry, and the doors to the bankruptcy courts remain shut. Are the other federal courts off-limits as well? A recent district court decision from the Southern District of California sheds some light on this issue, and indicates that the district courts are at least partially open to participants in legal cannabis businesses.
Factual Background
Here we go again – proposed bankruptcy venue legislation is back after previous “reform” efforts came up empty. For those seeking legislative action, what are the chances for venue reform now?
The Court (Mr Justice Miles) has refused to sanction a scheme of arrangement (the “Scheme”) between ALL Scheme Limited (the “Company”) and its creditors. The Company is an entity within the Amigo group of companies (the “Group”).
In 2020, bankruptcy court doors continued to be shut to cannabis companies. Perhaps most troubling is the continued bar for companies that are only tangentially involved in the state-legalized cannabis industry. Although outlier cases exist, and even though courts have hinted that bankruptcy may be appropriate for some cannabis-related individuals and companies in some situations, there is a consensus now that bankruptcy is generally not available to individuals and companies engaged, directly or indirectly, in the cannabis industry.
What are the new provisions?
The UK Government has issued secondary legislation extending the period of applicability of certain temporary provisions of the Corporate Insolvency and Governance Act 2020 (“CIGA”).
Introduction
On 20 May 2020, the UK Government published the Corporate Insolvency and Governance Bill (the “Bill”). The Bill was published in response to Covid-19 with a view to assisting companies and directors through these challenging times.