The Office of Financial Sanctions Implementation (OFSI) has published guidance (the Guidance) following the publication of the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024 (the Regulations) on 14 November 2024. OFSI is the body with regulatory oversight of the financial sanctions regime and is responsible for its implementation and enforcement within the UK.

The recent High Court decisions in Boughey & Anor v Toogood International Transport and Agricultural Services Ltd and Re Pindar Scarborough Ltd (in administration) have helpfully provided clarity on the extent to which secured creditors that have been paid in full are required to consent to proposed administration extensions. Unhelpfully, however, the court’s approach is fundamentally at odds with the position of the Insolvency Service.

In Mitchell and others v Al Jaber; Al Jaber and others v JJW Ltd [2024] EWCA Civ 423 the Court of Appeal has confirmed that a director remained subject to a continuing fiduciary duty post liquidation when purporting to transfer assets owned by that company, on the basis he was an “intermeddler”. While the case concerned a BVI company, the court’s decision was based on English-law authorities and therefore has wider significance.

Facts

The High Court has handed down an important decision confirming that an unrecognised foreign judgment can be used to form the basis of a bankruptcy petition.

In rejecting the bankrupt’s appeal, the court confirmed that a debt arising pursuant to such a judgment is capable of constituting a “debt” for the purposes of section 267 Insolvency Act 1986 (the Act), despite the fact that the underlying judgment had not been the subject of recognition proceedings in England.

Facts

The Court of Appeal has handed down judgment in the case of Humphrey v Bennett, providing some useful guidance on the nature and scope of a director’s duty to avoid conflicts of interest. The case was an appeal against summary judgment of the High Court following a derivative claim brought on behalf of a company by minority shareholders. The case will be of particular interest to directors of smaller companies whose management structures very often operate on a more informal footing.

The well-publicised restructuring of the Galapagos group (the group) in 2019 spawned multiple challenges by stakeholders in the courts of a number of different jurisdictions. The latest decision of the English High Court considers the interpretation of the Distressed Disposal provision within an LMA-form intercreditor agreement (ICA) following a challenge by subordinated noteholders (the noteholders) to the validity of the release of their claims as part of the wider restructuring.

If a debt arises from a contract that contains an exclusive jurisdiction clause (EJC) in favour of a foreign court, how will the Hong Kong court deal with a bankruptcy petition based on that debt? A highly anticipated judgment from Hong Kong’s highest court suggests that the bankruptcy petition will likely be dismissed, and that the foreign EJC will be given effect. But, as we will discuss below, the Court seems to leave other possibilities open, depending on the facts in a particular case.

The High Court has approved the sale of a portfolio of securities owned by Sova Capital Limited (Sova) to an unsecured creditor in consideration of the release of that creditor’s claim. The court’s approval of the transaction in this case marks the first reported decision on an unsecured credit bid for the assets of a company in administration (Re Sova Capital Limited (in special administration) [2023] EWHC 452 (Ch)).

Facts

The Supreme Court handed down its long-awaited judgment in BTI 2014 LLC v Sequana SA on 5 October 2022. This important case addresses the duties of directors to consider the interests of creditors as a company approaches insolvency.

While the judgment will be welcomed by many as providing some useful guidance on a number of issues, there still remain some key areas of uncertainty which, as we consider in further detail below, will present clear challenges for directors seeking to navigate their way through a company’s financial difficulties.

A recent Hong Kong Court of Appeal decision examined a creditor’s right to commence bankruptcy/insolvency proceedings where the petition debt arises from an agreement containing an exclusive jurisdiction clause in favour of a foreign court: Guy Kwok-Hung Lam v Tor Asia Credit Master Fund LP [2022] HKCA 1297.