The High Court decision in Burnden Holdings clarifies the law on retrospective attacks on the declaration of dividends.

SUMMARY

Summary

SUMMARY

The Court of Appeal of England and Wales (“CA”) made a significant ruling on two matters affecting the powers and duties of directors of English companies.

Summary

English law restructuring and insolvency tools are used to implement financial restructurings and the external administration of foreign companies. The attractiveness of the English tools and legal system is highlighted by the prevalence of companies incorporated abroad, especially companies incorporated in the EU, which avail themselves of those tools. English law in this area is impacted by much European law.

English Law Challenges to EU Bank Restructurings Firmly Closed off by U.K. Supreme Court

Summary – Decision of U.K. Supreme Court

Key Points

• A binding contract by exchange of email did not arise where parties were simply exploring a potential deal.

• Sale by auction is often appropriate where an asset is difficult to value.

• Where no differential treatment of creditors, unfair harm requires that a decision does not withstand logical analysis.

The Facts

Investors may, for reasons outside of their control, find themselves with a financially distressed company in their portfolio and possibly in unfamiliar territory. Consequently, it is not just those investors who actively seek out opportunities within the distressed space who should be mindful of the implications of insolvency processes (most commonly administration which can often also be used as part of a wider restructuring).

Key points

• Failure to comply with sections 333 and 363 of the Insolvency Act constitutes contempt of court for which a committal order may be obtained.

• A trustee in bankruptcy should not usually require permission to apply for a committal order.

• Correct procedure for application confirmed by the court.

Distressed and special situations investors should take note of the U.S. Bankruptcy Court’s recent decision in Oi’s Chapter 15 case. We present our takeaways for investors.