Contract Natural Gas Limited v ZOG Energy Ltd [1] is the first post-Enterprise Act 2002 judgment on the effect of administration on limitation. After reviewing existing authority and statute, the Court confirmed that (among other things) time does not stop running for limitation purposes when a company enters a post-Enterprise Act administration. Fraser Ritson, Aziz Abdul and Brian Rostron acted for Joshua Dwyer and William Wright in their capacity as the joint liquidators of Contract Natural Gas Limited – in Liquidation.

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.

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.

TODAY, THE EAGERLY-AWAITED JUDGMENT HAS BEEN HANDED DOWN BY MR JUSTICE ZACAROLI IN RESPECT OF THE APPLICATION FOR DIRECTIONS MADE BY OFFICE-HOLDERS OF A NUMBER OF FAILED ENERGY SUPPLIERS. 

The impact of this judgment will be felt much wider than just within the applicants' insolvent estates and it is relevant to any office-holder or unsecured creditor of a failed energy supplier.

In our previous commentary, we concluded that the ‘The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021’ (Regulations) had enacted a tick-box exercise for experienced market participants.

Madoff

On April 19, 2021, the U.S. Supreme Court declined to hear the appeal of a landmark 2019 decision issued by the U.S. Court of Appeals for the Second Circuit regarding the applicability of the Bankruptcy Code's safe harbor for certain securities, commodity, or forward contract payments to prevent the avoidance in bankruptcy of $8.3 billion in payments made to the shareholders of Tribune Co. as part of its 2007 leveraged buyout ("LBO").

The Government is attempting to shackle transfers to connected parties by way of pre-pack Administration.

The new draft 'Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021', published 24 February (Draft Regulations), are designed to further increase transparency for the wider stakeholder body in connection with pre-packaged Administration business and asset sales to management, sponsors and other connected parties.

How the night time industries could make it through the last months of lockdown

In his address to the nation on Monday afternoon, the Prime Minister set out the government’s roadmap for cautiously easing lockdown restrictions in England. He shared the latest data on infection rates, hospitalisations and deaths, as well as early data showing the efficacy of vaccines.

The roadmap for leaving lockdown, which was published on gov.uk on Monday, seeks to balance health, economic and social factors with the very latest epidemiological data and advice.