In Re Swiss Cottage [2022] EWHC 1495 (Ch), junior creditors argued that administrators appointed to two companies had exceeded their powers and breached their duties when selling two properties.
Background
The High Court has sanctioned the restructuring plan of ED&F Holdings Ltd, providing further clarity on the exercise of its discretion to sanction a plan using cross-class cram down.
Background
At the convening hearing, the court ordered that five creditor and two member class meetings be held. All but one of the creditor classes approved the plan by large majorities.
Sanction hearing
The English High Court has sanctioned Smile Telecom Holding Limited's (Smile) restructuring plan, despite there being no parallel restructuring proceedings in Mauritius, the place of Smile's incorporation.
Background
The temporary restrictions on the winding up of companies were lifted on 31 March 2022. This means the legal regime governing insolvency has returned to its pre-pandemic approach.
The pre-31 March position
The English High Court has rejected a creditor's application to bring a moratorium to an end following the monitors' decision not to terminate the moratorium.
Background
A monitor must terminate the moratorium if they 'think' that the company is unable to pay any pre-moratorium debts for which the company does not have a 'payment holiday'. Surprisingly, debts arising under an agreement involving 'financial services' are excluded from the payment holiday.
Decision
This past year was marked by extraordinary deal activity. Record breaking M&A activity drove record breaking private credit activity. Private equity M&A activity was at a substantial high, with over 8,500 deals worth $2.1 trillion, a 60% increase over 2020. Not surprisingly, in this environment, defaults were at all-time lows. The Proskauer Private Credit Default tracker showed an active default rate of approximately 1% at the end of 2021, compared to 3.6% in 2020.
On 21 December 2021, the UK government launched the future of insolvency regulation consultation, proposing significant changes to insolvency regulation which it says 'has not kept pace with developments in the insolvency market.'
Despite the Supreme Court’s rejection of a structured dismissal in 2017,[1] there is a growing trend of bankruptcy courts approving structured dismissals of chapter 11 cases following a successful sale of a debtor’s assets under Section 363 of the Bankruptcy Code.
On 15 November 2021, the English Court released its reasoned judgment for the sanction of Amicus Finance Plc's (Amicus) restructuring plan.
Background
Amicus, a short term property lender, entered administration in 2018. The administrators proposed a restructuring plan to compromise creditors' claims, exit the administration and ultimately restore the company as a going concern. The company faced imminent liquidation if the plan was not approved. Secured creditor, Crowdstacker, an online peer-to-peer lending platform, opposed the plan.
The High Court recently decided that a prosecution could be brought against an administrator under the Trade Union and Labour Relations (Consolidation) Act (TULRCA) in R (on the application of Palmer) v Northern Derbyshire Magistrates' Court [2021] EWHC 3013.