Key Points
- Court held notice to scheme creditors (here two weeks) was not sufficient in light of complexity of scheme
- Court also highlighted deficiencies in supporting documentation
The Facts
Key points
- Principles applying to exercise of liquidators’ powers are the same as those prior to legislative changes
- Views of creditors influenced by personal considerations to be disregarded
- The overriding requirement is for liquidators to exercise their professional judgment in the best interests of creditors
The facts
Two recent court decisions may affect an equity sponsor’s options when deciding whether and how to put money into - or take money out of - a portfolio company. The first may expand the scope of “inequitable conduct” that, in certain Chapter 11 settings, could lead a court to equitably subordinate a loan made by a sponsor to its portfolio company, placing the loan behind all of the company’s other debt in the payment queue. The second decision muddies the waters of precedent under the U.S. Bankruptcy Code on the issue of the avoidability of non-U.S.
Key Points
- Test for personal service of bankruptcy petition same as for claim forms
- Document to be handed to debtor or contents explained and left “with or near” debtor
- Rule 7.55 can be used to remedy any irregularity in service if necessary
The Facts
Two recent court decisions may result in a broadening of the range of options available to an equity sponsor in respect of an insolvent portfolio company. The first decision may provide increased flexibility in structuring asset sales in certain chapter 11 settings, by utilizing escrows and other techniques to potentially avoid the need to apply asset-sale proceeds strictly in accordance with creditor priorities under the U.S. Bankruptcy Code.
Key Points
- Court considers the impact of the Spanish Insolvency Act on guarantees governed by English law
- Court holds that the liability under the guarantee was not extinguished
The Facts
Key Points
- An administrator may be able appeal an order restoring a company following dissolution
- The court has jurisdiction to backdate a winding up order made following restoration to the date of dissolution
- The court must exercise its discretion to do so with extreme caution
The Facts
Client Connection Limited (“Company”) was placed into administration and Ms Sharma (“A”) was appointed as administrator. Following a pre-pack sale of the business of the Company, A moved the Company to dissolution.
Key Points
- Court considers the ownership of assets situated at premises owned by the bankrupt in the context of limited relevant evidence
- Court emphasises the importance of joining the correct parties to litigation
The Facts
When a portfolio company underperforms, a sponsor may consider various options to address the perceived performance issues, including changes to a portfolio company’s management team, cost structure, capital structure or other parameters, depending on the nature of the issue(s) at hand. When changes in capital structure may be desirable, often in the context of excessive debt and related liquidity issues, a sponsor’s choices may include a consensual workout outside of bankruptcy, or a court-supervised restructuring under Chapter 11 of the U.S.
Key points
- Section 236 (inquiry into company’s dealings) does not have extra-territorial effect
- Section 237(3) (examination) only has extra-territorial effect where appropriate machinery exists in the foreign jurisdiction
- Taking of Evidence Regulation not available where litigation not commenced or contemplated
The facts