Key Points
- The principle of modified universalism (being the principle underlying the common law power to assist foreign insolvency proceedings) continues to exist
- There is a common law power to order production of information to assist foreign insolvency proceedings
- Common law assistance does not enable office holders to do something they would not be able to do under the insolvency laws by which they are appointed
The Facts
Key Points
- Court cannot grant relief under the UK Cross Border Insolvency Regulations 2006 (CBIR) where it could not provide such relief in a domestic insolvency.
- Even if such option were possible, court would not do so where a contract is governed by English law.
- Possibility of effectively applying provisions of foreign law under the CBIR restricted.
The Facts
Key Points
Where a sole director and shareholder of a company had breached fiduciary duties he could not ratify the breach if the company was insolvent;
Claims against the company in liquidation by dishonest assisting parties could not be set off under rule 4.90 Insolvency Rules against any liability they had in damages for that assistance.
The Facts
This article was originally published in the January 2014 issue of Pratt's Journal of Bankruptcy Law.
Preference actions are common in bankruptcy cases. These actions seek to claw back payments made by a debtor to a creditor during the 90 days before the commencement of a bankruptcy case.
As if buying distressed debt is not challenging enough given the underlying business considerations, the possible, and perhaps likely, bankruptcy filing of your soon-to-be borrower presents a maze of issues the note purchaser should consider before acquiring the debt.
1. Know Your Seller