New rules in the UK allow Companies House to share non-public information with insolvency officeholders and the Official Receiver.

While in many cases there may be limited non-public information available from Companies House that will be useful to insolvency officeholders, this is another tool available to deploy in appropriate cases. It is specifically envisaged to assist officeholders pursuing claims for fraudulent and wrongful trading, transactions at an undervalue and preferences.

A bedrock principle underlying chapter 11 of the Bankruptcy Code is that creditors, shareholders, and other stakeholders should be provided with adequate information to make an informed decision to either accept or reject a chapter 11 plan. For this reason, the Bankruptcy Code provides that any "solicitation" of votes for or against a plan must be preceded or accompanied by stakeholders' receipt of a "disclosure statement" approved by the bankruptcy court explaining the background of the case as well as the key provisions of the chapter 11 plan.

Following a series of important decisions in England and across Europe, it is now beyond doubt that court-based restructuring processes should be approached from the outset as pieces of litigation.

We have seen increasingly sophisticated challenges to restructurings, which the courts are willing to accommodate. In appropriate cases, the courts have also refused to sanction restructurings.

In a recent case, the Victorian Supreme Court said that an accountant ‘would know well that a statutory demand involves strict time frames for response and potentially very significant consequences for a company’. The accountant failed to take appropriate steps to inform the company of the statutory demand.

The statutory demand process

If a company does not comply with a statutory demand within 21 days of service, it is deemed to be insolvent and the creditor may proceed to wind up the company.

A recent court decision considers the legal principles and sufficiency of evidence when a court-appointed receiver seeks approval of their remuneration.

A court-appointed receiver needs court approval for the payment of their remuneration. The receiver has the onus of establishing the reasonableness of the work performed and of the remuneration sought.

On 16 May 2023, Mr Justice Adam Johnson in the High Court refused to sanction the restructuring plan proposed by The Great Annual Savings Company Limited (GAS) following objections from HMRC.

In Short

The Situation: The U.S. Supreme Court considered whether § 363(m) of the Bankruptcy Code, which limits a party's ability to undo an asset transfer made to a good-faith purchaser in a bankruptcy case, is jurisdictional.

The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a "fresh start" for debtors and to maximize the value of the bankruptcy estate for the benefit of all stakeholders. However, the Bankruptcy Code establishes strict requirements for the assumption or assignment of contracts and leases.

On 30 March 2022, the English court sanctioned the most recent restructuring plan proposed by Smile Telecoms Holdings Limited (Smile).

A recent England and Wales High Court decision demonstrates the increasingly litigious nature of Court-supervised restructuring processes. It also addresses the Court’s approach to whether foreign recognition risks represent a ‘blot’ on a proposed scheme of arrangement so that the Court should decline sanction ('the recognition/blot question').