The insolvency statistics released for March 2023 demonstrate the impact of turbulent trading climates on UK businesses, in particular soaring costs and decreased consumer spending.
The March 2023 insolvency statistics show that UK corporate insolvencies have risen 16% year-on-year and 38% since February 2023.
The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
Background
Background
Decision
Key takeaways
The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
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.
WithinIn re LTL Management, LLC, No. 22-2003 (3d Cir. Jan. 30, 2023), the United States Court of Appeals for the Third Circuit issued its decision on the J&J “Texas –Two Step” bankruptcy saga. The Court’s decision complimented the parties and the lower court for their thorough analysis of the issues, but refocused practitioners on a basic bankruptcy principle:
[A bankruptcy filing] gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.
In a unanimous decision Bartenwerfer v Buckley, No. 21-908, 598 U.S. (2023), the U.S. Supreme Court reviewed the breath of the U.S. Bankruptcy Code’s discharge provision – and exceptions thereto – and held that a debt resulting from fraud (even where the debtor was not directly involved) is, nevertheless, nondischargeable. While the Court’s principles provide a roadmap for analyzing potentially nondischargeable claims, it also expands what was originally thought to be a “narrow” exception to discharge.
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
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