Introduction

Today, the UK Supreme Court considered for the first time the existence, content and engagement of the so-called “creditor duty”: the alleged duty of a company’s directors to consider, or to act in accordance with, the interests of the company’s creditors when the company becomes insolvent, or when it approaches, or is at real risk of, insolvency.

October Bankruptcy Developments

July Bankruptcy and Restructuring Developments

The High Court in London gave judgment on Friday, 3 July 2020 on the relative ranking of over $10 billion of subordinated liabilities in the administrations of two entities in the Lehman Brothers group.

May Restructuring Activity

May 4 – OneWeb Global Ltd., which filed for Chapter 11 bankruptcy protection in the United States in March, received multiple initial letters of interest from potential purchasers. Final binding bids are due June 26, along with a deposit equal to 10% of bid value, and an auction is scheduled for July 2.

The recent decisions in Re MF Global UK Ltd and Re Omni Trustees Ltd give conflicting views as to whether section 236 of the Insolvency Act 1986 has extra-territorial effect. In this article, we look at the reasoning in the two judgments and discuss a possible further argument for extra-territorial effect.

The conflicting rulings on section 236

On April 17, NewSat Ltd. (NewSat) and various affiliates, including Jabiru Satellite Holdings Pty Ltd., were placed in administration in Australia by the trustee for its lenders, Citicorp International, and related petitions were filed in the U.S.

On March 25, LightSquared Inc. obtained U.S. Bankruptcy Court approval to exit Chapter 11 protection pursuant to a restructuring plan that will pay its largest creditor, Charles Ergen, roughly $1.5b in cash to account for full repayment, with interest, of Ergen’s holdings of LightSquared debt.