U.S. courts have a long-standing tradition of recognizing or enforcing the laws and court rulings of other nations as an exercise of international "comity." It has been generally understood that recognition of a foreign bankruptcy proceeding under chapter 15 is a prerequisite to a U.S. court enforcing, under the doctrine of comity, an order or judgment entered in a foreign bankruptcy proceeding or a provision in foreign bankruptcy law applicable to a debtor in such a proceeding.

In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of international comity. However, U.S. bankruptcy courts sometimes disagree over the precise statutory authority for granting such relief, because the provisions of chapter 15 are not particularly clear on this point in all cases.

Amplifying JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd [2018] EWCA CIV 276 the court has again considered repeated Notices of Intention to Appoint (NOITA) and the effect on the interim moratorium.

Background

This case involved the Company filing 4 successive NOITAs although only two of them were the subject of these proceedings (NOITA 1 and NOITA 2).

The Company owned a Property which was subject to a legal mortgage and QFC. The secured loan was in default and the Company was seeking to delay enforcement whilst it refinanced.

The proposed new regulations to safeguard the proprietary of pre-packs have caused alarm in the profession, one of the areas of concern being the requirement that the Evaluator central to the process requires no professional qualifications but thankfully are qualified if they think they are (yes, you did detect some sarcasm).

The Regulations will mean that an administrator cannot execute a pre-pack if the following applies:

Background

The Debtor was 82 years of age, and subject to a bankruptcy petition in the County Court in the sum of £62,000 which was heard on 19 December 2019.

The issue in this case concerned the failure of a holder of a Qualifying Floating Charge (QFC) to give notice to a prior QFC holder before appointing administrators, therefore potentially calling into question the validity of the administration.

The facts of this case were somewhat unusual although it serves as a reminder of the principles involved in the trading of a business by a trustee in bankruptcy.

Background

The background facts to this case are relatively straightforward: a group of companies consisting of the parent (‘AIL’) and three subsidiaries (‘the Subsidiaries’) operated in the energy sector.

A lender (‘Junior Creditor’) advanced approximately £39M to AIL, secured by qualifying floating charges (‘QFC’) over AIL and the Subsidiaries. A second lender (‘Senior Creditor’) subsequently lent £5M to AIL secured by a QFC over AIL but not the Subsidiaries.

Twelve creditors (representing about 16% of company debt, and represented by a firm of licensed insolvency practitioners) have failed in an attempt to compel administrators to move to creditors’ voluntary liquidation, alternatively an order for compulsory liquidation. The Creditors also sought the revocation of a proposal ‘purported to have been deemed approved’.

The Company was involved in construction work, falling victim to the Covid-19 pandemic in that it was forced to cease trading following the announcement of lockdown on 23 March 2020.

The EMEA Determinations Committee's recent bankruptcy determination involving Selecta CDS provides additional insight on the types of chapter 15 filings that are likely to trigger Credit Events.