Background
As things currently stand
The aim of the EC Regulation on Insolvency Proceedings (1346/2000) (Regulation) is to improve the efficiency of insolvency proceedings with cross border aspects. It provides, within the European Union (EU), rules for determining:
The reform agenda for Australia's restructuring and insolvency regime has now received the views of the Productivity Commission, in the context of its wider review of Business Set-Up, Transfer and Closure. A draft report published on 21 May 2015 sets out a number of recommendations that, while mostly not new to the reform agenda, will be relevant to restructuring and insolvency professionals in the not-too-distant future.
In the latest decision on COMI (Northsea Base Investment Limited & ors [2015] EWHC 121 (Ch)), the English Court had to determine the centre of main interest for a group of companies registered in Cyprus, but where the operations of the companies were managed by a shipping agent in London.
Need to know
In a first for the US and Australian markets, the Buccaneer Energy group of companies successfully had bankruptcy plans approved by the US Bankruptcy Court for both US and Australian incorporated debtor companies.
"Once in a generation" review
Shortly before the Christmas break, the much anticipated review of the United States "Chapter 11 bankruptcy" regime was published by the American Bankruptcy Institute (ABI). This is one of very few such major "root and branch" reviews of Chapter 11 since its enactment in 1978, and the first since the 1990s.
The UK court recently considered the extent of s236 Insolvency Act 1986 (“IA 1986”) in the case of Re Comet Group Ltd (in liquidation); Khan and others v Whirlpool (UK) Ltd and another [2014] EWHC 3477 (Ch).
Key Points
- Phones 4U went into administration in September 2014.
- Technology companies in the US have also faced a difficult market.
- Phones 4U’s complicated financing structure contributed to its downfall, as did its reliance on one or two key suppliers.
- The Protection of Essential Supplies Order will have considerable ramifications for tech suppliers when it comes into force.
PHONES 4U COLLAPSE: PART 1
On 25 July 2014 and 17 September 2014 respectively, Justice Brereton of the Supreme Court of NSW delivered two related judgments in Re AAA Financial Intelligence Ltd (in liquidation) andRe AAA Financial Intelligence Ltd (in liquidation) (No 2). The decisions deal with the evergreen topic of Liquidator remuneration and expenses.
Importantly, in fixing the Liquidators' remuneration, Justice Brereton adopted a "value" focussed approach, and discussed the relevance of considering matters beyond simply time spent multiplied by fixed hourly rates.
Since BP Australia Pty Ltd v Brown, there has been a practice of Courts across Australia granting "shelf orders", whereby time for voidable transaction recovery actions by a Liquidator under section 588FF is extended "at large". The Court's power to grant these "shelf orders", however, is to be scrutinised by the High Court in December 2014, in the course of the Octaviar group liquidation.
In Re Lehman Brothers International (Europe) (in administration) and others [2014] EWHC 704 (Ch), the High Court ruled on issues regarding the order of distributions and payments in the administration and potential liquidation of various Lehman entities. This wide-ranging judgment gives clarity on a number of previously uncertain issues.