On the eve of trial, the Insolvency Service (IS), acting on behalf of the Secretary of State for Business and Trade, has discontinued disqualification proceedings brought in January 2021 against five former non-executive directors (NEDs) of Carillion plc. The trial, which had been listed for around 13 weeks (and originally as long as 6 months) had been due to start on Monday 16 October 2023.
The High Court has held that certain assets sold by a company around the time of its administration were subject to a fixed charge rather than a floating charge and as such, the sale proceeds were not to be distributed to preferential creditors or unsecured creditors: Avanti Communications Ltd, Re [2023] EWHC 940 (Ch).
A much-anticipated UK decision confirms directors' obligations to creditors, but changes little in practice
The Bankruptcy Code confers upon debtors or trustees, as the case may be, the power to avoid certain preferential or fraudulent transfers made to creditors within prescribed guidelines and limitations. The U.S. Bankruptcy Court for the District of New Mexico recently addressed the contours of these powers through a recent decision inU.S. Glove v. Jacobs, Adv. No. 21-1009, (Bankr. D.N.M.
In In re Smith, (B.A.P. 10th Cir., Aug. 18, 2020), the U.S. Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Tenth Circuit recently joined the majority of circuit courts of appeals in finding that a creditor seeking a judgment of nondischargeability must demonstrate that the injury caused by the prepetition debtor was both willful and malicious under Section 523(a)(6) of the Bankruptcy Code.
Factual Background
In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that claim disallowance issues under Section 502(d) of the Bankruptcy Code "travel with" the claim, and not with the claimant. Declining to follow a published district court decision from the same federal district, the bankruptcy court found that section 502(d) applies to disallow a transferred claim regardless of whether the transferee acquired its claim through an assignment or an outright sale. See In re Firestar Diamond, 615 B.R. 161 (Bankr. S.D.N.Y. 2020).
The High Court has expedited a trial at which it would be determined whether luxury car manufacturer McLaren Group could obtain the release of certain security for the benefit of its senior noteholders, failing which a financial restructuring which was contingent on that release could not be implemented: McLaren Holdings Ltd v US Bank Trustees Ltd [2020] EWHC 1892 (Ch). The court concluded that, absent determination of the proceedings within one month, McLaren Group would have no choice but to enter an insolvency process and that this justified expedition in this case.
InIn re Juarez, 603 B.R. 610 (9th Cir. BAP 2019), the Bankruptcy Appellate Panel of the U.S. Court of Appeals for the Ninth Circuit addressed a question of first impression in the circuit with respect to property that is exempt from creditor reach: it adopted the view that, under the "new value exception" to the "absolute priority rule," an individual Chapter 11 debtor intending to retain such property need not make a "new value" contribution covering the value of the exemption.
Background
The High Court has held that s.236 of the Insolvency Act 1986 (“IA 1986”) does not have extra-territorial effect, so that the court is not generally permitted to make an order requiring a person outside the UK to produce books and papers and give an account of their dealings with an insolvent company: Re Akkurate Ltd (in Liquidation) [2020] EWHC 1433 (Ch).
The Government on 20 May 2020 published the Corporate Insolvency and Governance Bill, which contains the most far-reaching reforms to UK insolvency law in over 30 years. The Bill has been introduced on an emergency basis in an attempt to ensure that otherwise financially viable companies survive during a period of unprecedented interruption and turmoil. However, it could upset the delicate balance between debtors and creditors under UK insolvency law.