Introduction

The proud sporting nations of Ireland and England have for some time traded blows and bragging rights within the Six Nations Tournament as the two pre-eminent and consistent "Home Nations" rugby teams. While the two sides share some similarities in the rebuilding process following the World Cup in France 2023, ahead of this Saturday's clash, few can argue with Ireland's emphatic start to this year's tournament. England, however, can never be written off at Twickenham, so a potential blockbuster awaits!

Background

On 5 October 2022, the Supreme Court handed down its long-awaited judgment in BTI 2014 LLC v. Sequana S.A. [2022] UKSC 25 concerning the trigger point at which directors must have regard to the interests of creditors pursuant to s.172(3) of the Companies Act 2006 (the "creditors' interests duty").

In this article, Dentons gives its inside view on the pre-pack evaluator's report, made compulsory earlier this year to improve the confidence of creditors in pre-pack administration sales to connected persons. We consider the practicalities of selecting the right evaluator for the job, the potential for "opinion shopping" from evaluators and whether these new regulations have achieved what was intended.

A recap on pre-packs

Executive summary

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.

Last week saw the government further extend COVID-19 emergency insolvency provisions until 31 March 2021. Since April, these have:

Today, new legislation comes into force* that provides directors of companies in financial difficulty with a second breathing space from the financial impact of the wrongful trading provisions.

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 Corporate Insolvency and Governance Act 2020 introduces a temporary, retrospective suspension of the directors' personal financial liability for wrongful trading from 1 March 2020 until 30 September 2020. This is not a blanket defence to a breach of duty by directors, since the directors' general duties to act in the best interests of the company (or, on insolvency, its creditors),will continue to apply.