Contract Natural Gas Limited v ZOG Energy Ltd [1] is the first post-Enterprise Act 2002 judgment on the effect of administration on limitation. After reviewing existing authority and statute, the Court confirmed that (among other things) time does not stop running for limitation purposes when a company enters a post-Enterprise Act administration. Fraser Ritson, Aziz Abdul and Brian Rostron acted for Joshua Dwyer and William Wright in their capacity as the joint liquidators of Contract Natural Gas Limited – in Liquidation.
On 27 February 2024, the High Court sanctioned a restructuring plan (the Plan) proposed by CB&I UK Limited (CB&I), part of the global McDermott construction and engineering group (the Group). This is the first English restructuring plan to be approved after the Court of Appeal judgment in Adler (see our Alert) and follows the guidance in that case.
Background
On 23 January 2024, the Court of Appeal overturned the High Court's sanction of Adler Group's (Adler) restructuring plan (the Plan) (see our alert). This much anticipated judgment provides clarity on the court's discretion to sanction a plan where there are dissenting classes of creditors.
Background
The Plan envisaged:
The Court of Appeal has recently referred to established case law that the court will only interfere with the act of an officeholder “if he has done something so utterly unreasonable and absurd that no reasonable man would have done it”.
While the judge in the lower court had not made any error of law, on the facts there were identifiable flaws in the judge's reasoning that the trustees' decision not to join in the proceedings was perverse.
The judge had failed to recognise that:
After a weekend that saw the tech ecosystem unite to fight for its future, on Monday 13 March 2023, the Bank of England (the Bank) effected the sale of Silicon Valley Bank UK Ltd (SVB UK) to HSBC. It used the resolution powers for stabilising failing banks granted by the Banking Act 2009 which were introduced following the 2008/9 financial crisis.
Resolution powers
KARL CLOWRY, SEÁN MCGUINNESS, AND AZIZ ABDUL LOOK TO THE LESSONS FOR SHAREHOLDERS, CREDITORS AND ADMINISTRATORS FROM THE FIRST CREDITOR LED RESTRUCTURING PLAN.
The Good Box Co Labs Limited (in Administration) case demonstrates once more the viability of the process for the mid-market and continues a trend of RPs being used by a determined creditor / shareholder constituency to rescue an equity investment within an existing corporate group. In short, the mid-market RP is still a highly situational, albeit flexible, tool."
The UK insolvency statistics released on 2 August for Q2 2022 (1 April – 30 June 2022) make for fairly sombre, if not entirely unsurprising, reading.
An 81% increase in corporate insolvencies in England and Wales from the same period in 2021 and a 13% increase in insolvencies from Q1 2022. The worst affected sectors are reported to include food, retail and construction.
The UK High Court has excluded 'out of the money' creditors and shareholders from voting on Smile Telecoms Holdings Limited’s (Smile) restructuring plan because they did not have a genuine economic interest in the company.
Background
Introduction
Earlier this month, the English Insolvency and Companies Court (the “ICC”) made a limited civil restraint order against a shareholder who had repeatedly sought, unmeritoriously, to challenge the 2017 restructuring of Paragon Offshore plc (in liquidation) (“Paragon”) (Hammersley v Soden & Ors [2022] EWHC 223 (Ch)).