The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
Background
Mizen Design/Build Ltd's (Mizen) directors proposed a CVA stating that this would lead to a better result for unsecured creditors than the likely alternative, administration.
The CVA compromised guarantee creditors' ability both to bring a claim against Mizen and to call upon their performance guarantees against Mizen's parent company (the Parent Guarantor).
This recent decision has opened up a new opportunity for creditors who are not satisfied with a proposal to put forward their own restructuring plan.
Background
Good Box Co Labs Limited (the Company), a fintech start-up, developed contactless payment technologies in the charity sector.
It entered administration in June 2022 on the application of NGI Systems Limited (NGI) a principal technology supplier, creditor and shareholder of the Company.
CargoLogicAir Limited (the Company) was the UK's only all-cargo main deck freight airline. Due to sanctions imposed on its Russian owner, the Company was unable to effectively trade and pay its debts as they fell due despite obtaining a 'Basic Needs Licence'. Its sole director applied to appoint administrators.
Issues
The court considered two key issues:
On 7 December 2022, the European Commission published its proposal for a directive harmonising certain aspects of insolvency law (the Insolvency Directive).
The Insolvency Directive seeks to offer more certainty and create a common minimum standard of insolvency regimes across member states, encouraging more effective cross-border investment.
It aims to harmonise three key areas of EU insolvency law (the Insolvency Directive).
Aims law:
the recovery of assets
the efficiency of proceedings
Earlier this month, the SDNY Bankruptcy Court answered one of the gating questions at the center of Celsius Network’s Chapter 11 bankruptcy regarding the ownership of the approximately $4.2 billion in crypto assets.
On 7 December 2022, the European Commission published its proposal for a directive harmonising certain aspects of insolvency law (the Insolvency Directive).
Aims
The Insolvency Directive seeks to offer more certainty and create a common minimum standard of insolvency regimes across Member States, encouraging more effective cross-border investment.
It aims to harmonise three key areas of EU insolvency law:
the recovery of assets
the efficiency of proceedings, and
Re Bitumina Industries Ltd (in administration); Manning and another v Neste AB and another [2022].
This was an application by joint administrators for directions on the validity of a floating charge granted to a connected party at a 'relevant time' and seemingly invalid under s245 of the Insolvency Act 1986 (the Act).
Background
Background
Decision
Key takeaways
The recent High Court decision in Re Nostrum Oil & Gas plc [2022] EWHC 2249 (Ch) considers a scheme of arrangement where creditors are the target of Russian sanctions.
BlockFi Inc. and eight of its affiliates followed the paths of crypto platforms Voyager, Celsius and FTX by filing for bankruptcy protection. The case, commenced in the District of New Jersey, on November 28, 2022, is off to a fast start. BlockFi filed a plan of reorganization on the first day of its case. The plan proposes a standalone restructuring but allows the company to toggle to a sale of all or substantially all of the company’s assets. The company had its first day hearing in New Jersey on November 29th and expressed an interest in exiting bankruptcy expeditiously.
Shoba Pillay, the Examiner appointed in Celsius’ bankruptcy cases, filed her interim report on November 19, 2022. The Celsius Examiner’s report provides some important insight into a crypto-exchange’s operational and risk management failures which may provide investors and creditors some insight into what to expect in FTX.