Borrower beware: in times of distress, your credit documents may give your secured lenders an opportunity to “flip” control of your board

Distress happens, even at companies that once appeared financially solid. When it does, the company, its board (which may be controlled by a sponsor in a public or private equity scenario), and its lenders often enter into restructuring discussions in search of a consensual path forward, typically under the terms of a forbearance agreement.

The High Court in Singapore has ordered the winding up of Hodlnaut Pte Ltd, a Singapore based cryptocurrency lending and borrowing platform, as it was cash flow insolvent given that the cryptocurrency funds held by the company from various creditors count as ‘debts’ within the meaning of s125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA).

As a director of a company, the regulatory landscape in England and Wales can feel like a scary place. The possible ways a director can become exposed can feel endless – especially if one asks Google.

Just ask any corporate lawyer fortunate enough to own the tome that is the Companies Act 2006. In the absence of becoming a legal expert, what can directors practically do to best protect themselves when carrying out their role?

This article will discuss whether or not a winding-up petition or bankruptcy petition can be based upon a liquidated amount of crypto which is due and payable by one party to another (a crypto-debt).

An example of such a case could be where party A agrees to transfer 100 widgets to party B in exchange for five bitcoin. Assume party A delivers the widgets, and party B accepts receipt and raises no issue with the widgets, and does not dispute their liability to transfer five bitcoin to party B.

The High Court decision in Re All Star Leisure (Group) Limited (2019), which confirmed the validity of an administration appointment by a qualified floating charge holder (QFCH) out of court hours by CE-Filing, will be welcomed.

The decision accepted that the rules did not currently provide for such an out of hours appointment to take place but it confirmed it was a defect capable of being cured and, perhaps more importantly, the court also stressed the need for an urgent review of the rules so that there is no doubt such an appointment could be made.

A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit has voided its previous near explicit declaration that make-whole provisions are always unmatured interest, and therefore subject to disallowance under section 502(b) of the Bankruptcy Code in Ultra Petroleum.

In certain circumstances, if a claim is proven, the defendant will be able to offset monies that are due to it from the claimant - this is known as set off.

Here, we cover the basics of set off, including the different types of set off and key points you need to know.

What is set off?

Where the right of set off arises, it can act as a defence to part or the whole of a claim.

Judge Drain has now issued a long-awaited Order on Remand from the Second Circuit’s decision in Momentive Performance Materials determining the appropriate cramdown interest rate applicable to replacement notes issued by Momentive.

In our update this month we take a look at some recent decisions that will be of interest to those involved in insolvency litigation. These include:

Creditor not obliged to take steps in foreign proceedings to preserve security