Directors of a company in financial distress will often turn to their professional advisors to assist in making decisions about the company’s future; whether that be their lawyers, accountants, bank, tax advisors or insolvency professionals.
The new Insolvency Practice Direction 2016 has finally been given approval by the Lord Chancellor and came into force yesterday (25 April) bringing with it changes to reflect the new Insolvency Rules 2016 and recent changes to the CPR. The new practice direction replaces that of 2014 with immediate effect. Key changes include:
On 15 January 2018, Carillion, the UK’s second-largest builder and one of the Government’s largest contractors, was placed into compulsory liquidation and the Official Receiver was appointed as liquidator, with Michael John Andrew Jervis, David James Kelly, David Christian Chubb, Peter Dickens, David Matthew Hammond and Russell Downs of PwC being appointed as special managers to assist in the wind down of the business and realisation of its assets.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
The recent case of Farnborough Airport Properties Company and another v HMRC is noteworthy for the light it shines on the dimly lit and often difficult interaction between tax law and insolvency.
The issues
For decades, restructuring and insolvency matters in the Dominican Republic involving merchants and companies in non-regulated industries have been carried out on a “de facto” basis, due to the obsolescence of the existing legal framework and institutions. Fortunately, that is not the case anymore.
On February 1, 2017, the Supreme Court of Singapore and the U.S. Bankruptcy Court for the District of Delaware announced that they had formally implemented Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (the "Guidelines"). The U.S. Bankruptcy Court for the Southern District of New York adopted the Guidelines on February 17, 2017.
The Act is a groundbreaking development in Singapore's corporate rescue laws and includes major changes to the rules governing schemes of arrangement, judicial management, and cross-border insolvency. The Act also incorporates several features of chapter 11 of the U.S. Bankruptcy Code, including super-priority rescue financing, cram-down powers, and prepackaged restructuring plans. The legislation may portend Singapore's emergence as a center for international debt restructuring.
In Short:
The Action: Courts in Singapore and the states of New York and Delaware have formally implemented Guidelines for Communication and Cooperation between Courts in Cross-border Insolvency Matters.
The Motivation: The Guidelines were developed to improve the efficiency and effectiveness of cross-border insolvency proceedings and to encourage coordination and cooperation among relevant courts.
Looking Ahead: Expect the Guidelines to be implemented in other significant jurisdictions.
On March 10, 2017, Singapore's Parliament approved the Companies (Amendment) Bill 2017 ("Act") to enhance the country's corporate debt restructuring framework. The Act was assented to by President Tony Tan Keng Yam on March 29, 2017, and became effective after it was published in the Singapore Government Gazette on March 30, 2017.