Key Point
An administrator appointed under a qualifying floating charge can "adopt" an existing winding up petition for the purposes of liquidating the company where the benefit to the creditors of the insolvent estate is manifest on the facts.
Facts
A "structured dismissal" of a chapter 11 case following a sale of substantially all of the debtor's assets has become increasingly common as a way to minimize cost and maximize creditor recoveries. However, only a handful of rulings have been issued on the subject, perhaps because bankruptcy courts are unclear as to whether the Bankruptcy Code authorizes the remedy. A Texas bankruptcy court recently added to this slim body of jurisprudence. InIn re Buffet Partners, L.P., 2014 BL 207602 (Bankr. N.D. Tex.
Key Point
Liability for utility bills arising in an administration after trading had ceased did not rank as an expense of the administration.
The facts
Key Point
The Court of Appeal has held that a UK company undergoing a financial restructuring was not entitled to recover VAT charged by accountants who prepared reports for the company's lenders use during the restructuring process.
The facts
Key Point
Two recent cases have resulted in innovative structures for restructuring the finances of groups of companies being sanctioned by the English Courts pursuant to schemes of arrangement. The trend for using such a mechanism for financial restructuring shows no signs of abating. On the contrary the innovative scope of such schemes appears to be expanding
Stemcor restructuring
The scheme
Background
Key Point
The liquidation of an agent for service appointed by a Borrower under a loan agreement did not prevent the Lender from validly serving process on the Borrower by delivering documents to that agent.
The facts
A loan agreement contained the following clause:
"Service of process. Without prejudice to any other mode of service allowed under any relevant laws, each Borrower -
Key Point
The Graham Review into pre-pack administrations suggests beefing up SIP16 and creating new steps in the sale process where the sale is to a connected party but stops short of proposing new legislation.
The Graham Review
Key point
Under English law there is a clear public interest in ensuring the timely and efficient administration of insolvent estates and parties should comply with all time limits in the Insolvency Rules 1986 unless there are good reasons for requiring more time.
The facts
Key point
The equitable rules designed to protect guarantors from amendments to the original financing agreements made without his consent do not apply to indemnities under English law.
The facts
A company entered into factoring arrangements. The directors entered into indemnities in favour of the factor.