The Treasury has released a consultation paper on changes to improve creditors’ schemes of arrangement in Australia (the Consultation Paper).[1] The main proposal in the Consultation Paper is the consideration of a broad automatic moratorium, available to companies proposing a creditors’ schem
In the recent case of Re Hydrodec Group Plc [2021] NSWSC 755 (Hydrodec) the Supreme Court of New South Wales (NSW Supreme Court or Court) rejected an application by a non-operating holding company, Hydrodec Group Plc (the Company), for recognition of its United Kingdom (UK) debtor-in-possession Part A1 moratorium process (Part A1 Moratorium) and relief from a winding up application being made against the Company in Australia.
Fallout from the global pandemic continues to throw light on the responsibilities of directors in times of financial distress. This briefing examines those duties in greater detail, particularly in relation to Guernsey’s company law.
Decisions, decisions
Directors owe duties to the companies they serve and ordinarily discharge those duties with reference to the interests of the companies’ members as a whole.
In this article, consultant John Greenfield, partner David Jones and associate Steven Balmer, examine innovative mechanisms by which creditors may seek to investigate secure assets held in Guernsey structures. In the second part of the article, the authors look particularly at companies and how the traditional insolvency regimes may be employed in aid of creditors but also at how the use of share security may unlock certain doors.
Recognition of UK insolvencies in Europe after Brexit[1] is navigating uncertain waters. Following the completion of Brexit, the UK has left parts of the EU's private international law realm, including the application of Regulation (EC) 1346/2000 on Insolvency proceedings (the EU Insolvency Regulation). Therefore, since January this year, any reciprocal statutory cooperation in insolvency law matters between the UK and the EU has ceased.
The Australian chapter of GRR’s Asia-Pacific Restructuring Review 2021, authored by Herbert Smith Freehills, is now available and reproduced below.
This latest edition covers major Australian legislative developments, transactions and case law relating to restructuring and insolvency in Australia over the past 12 months including:
Legislation
- Temporary COVID-19 insolvency law amendments
- Anti-phoenixing amendments to the Corporations Act
Key restructurings
We are pleased to announce the publication of the third edition of the Herbert Smith Freehills Guide to Restructuring, Turnaround and Insolvency, Asia Pacific.
Against a backdrop of the COVID-19 pandemic and the resulting economic downturn, we are seeing companies and lenders respond to a new and challenging business environment. The challenges associated with this new environment are further exacerbated as the influencing factors change in nature and intensity.
Statutory demands are often conflated with other debt recovery mechanisms available to creditors. Whilst a statutory demand may, in certain circumstances, be a useful tool in the debt recovery kit, its primary function is to establish whether a company can pay its debts as they fall due i.e. whether it satisfies the “cash flow test”.
In Guernsey, a company must pass both the cash flow and balance sheet solvency tests to meet the definition of solvency.
The Australian Federal Government has announced significant insolvency law reforms that will affect small businesses with liabilities of less than $1 million. The reforms are expected to commence on 1 January 2021 and will introduce, among other measures, a new debt restructuring process and liquidation pathway for small businesses which the Government intends to be simpler, more flexible and more efficient than existing processes.
In brief
The Australian Federal Government has announced the temporary amendments to insolvency and corporations laws will be extended until 31 December 2020 in light of the continuing challenges of COVID-19.
In brief