The Government has passed an omnibus bill which introduced amendments that will assist New Zealand to respond to the wide-ranging effects of COVID-19.

In brief the changes to insolvency legislation are:

In Re A Company (injunction to restrain presentation of petition) [2020] EWHC 1406 (Ch), the Court held that it is able to take into account the likelihood of a change in the relevant law in deciding whether to restrain a winding up application from being brought.

The English Court of Appeal in Re Debenhams Retail Ltd [2020] EWCA Civ 600 recently considered the inter-relationship between the UK Government’s Coronavirus Job Retention Scheme and the ‘adoption’ of employment contacts by administrators under the Insolvency Act 1986.  The issue was whether by paying only the amounts which may be claimed under the Scheme to furloughed employees, the administrators have adopted the contracts.  Adoption means that the wages and other entitlements are payable as expenses of the administration ahead of other expenses.  

The Federal Court of Australia in Strawbridge (Administrator), in the matter of CBCH Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 472 has made orders to release the administrators of retailer The Colette Group (the Group) from personal liability for rent for a two-week period during the COVID-19 pandemic. 

The Federal Court of Australia in Frisken, in the matter of Avant Garde Investments Pty Ltd v Cheema [2020] FCA 98 has considered a dispute between a receiver and the director of the company as to whether the provisional liquidator, Mr Banerjee, should be appointed as the liquidator. 

The director sought the appointment of different liquidators on the basis that Mr Banerjee’s conduct as provisional liquidator was such that a reasonable person might apprehend that he might not be impartial as liquidator. 

The U.S. Supreme Court recently handed down three rulings potentially impacting bankruptcy cases.

Nunc Pro TuncRelief

In Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, No. 18-921, 2020 WL 871715 (U.S. Feb. 24, 2020), the Court circumscribed the use of nunc pro tunc ("now for then") orders that make relief ordered by a court apply retroactively to an earlier point in time.

The Government has published the COVID-19 Response (Further Management Measures) Legislation Bill (the Bill), an omnibus bill containing amendments (both temporary and permanent) to several acts. These amendments aim to both assist organisations in effectively managing the “immediate impacts of the response to COVID-19”, as well as mitigating some of the pandemic’s “unnecessary and potentially longer-term impacts on society”.

The Situation: In the past few weeks, due to the severe impact of the COVID-19 crisis on non-essential businesses forced to close and terminate employees after filing for chapter 11 protection, bankruptcy courts have been confronted with requests by debtors to temporarily suspend their bankruptcy cases using the courts' equitable powers and a seldom-used provision of the Bankruptcy Code: 11 U.S.C. § 305(a).

In In re Tribune Co. Fraudulent Conveyance Litig., 946 F.3d 66 (2d Cir. 2019), the U.S. Court of Appeals for the Second Circuit reaffirmed, notwithstanding the U.S. Supreme Court's ruling in Merit Mgmt. Grp., LP v. FTI Consulting, Inc., 138 S. Ct. 883, 200 L. Ed. 2d 183 (2018), its 2016 decision that creditors' state law fraudulent transfer claims arising from the 2007 leveraged buyout ("LBO") of Tribune Co. ("Tribune") were preempted by the safe harbor for certain securities, commodities, or forward contract payments set forth in section 546(e) of the Bankruptcy Code.

In This Issue:

U.S. Supreme Court: Creditors May Immediately Appeal Denials of Automatic-Stay Relief