The High Court sanctioned Madagascar Oil Limited’s restructuring plan, exercising cross class cram down. The judgment deals with a few now familiar points: what is the relevant alternative? Can it be a different deal? As well as touching on a few novel ones in an unusual two class only plan: was there in fact an in the money class enabling cross class cram down? Almost a third of the judgment is devoted to international recognition and effectiveness of the plan in Madagascar and Mauritius, an unusually detailed analysis, but required here given the specific facts of the case.
This week’s TGIF considers a recent decision of the High Court of Australia, in which a 4:3 majority held that a former trustee is not owed any fiduciary obligation by a successor trustee.
Key takeaways
In Davis-Jacenko v Roxy’s Bootcamp Pty Limited [2024] NSWSC 702, McGrath J delivered an extempore decision, appointing provisional liquidators in respect of Roxy’s Bootcamp Pty Limited (theCompany). His Honour stated that it was “a paradigm case” for the court to intervene to preserve the status quo.
Key Takeaways
On 17 April 2024 the UK Jurisdiction Taskforce (theUKJT), chaired by Sir Geoffrey Vos published its Legal Statement on Digital Assets and English Insolvency Law.
2023 marked the highest annual number of corporate insolvencies since 1993, according to figures released by The Insolvency Service this week. While creditors’ voluntary liquidations remained by far the most commonly used process, 2023 saw increases across all processes tracked by the Insolvency Service.
When do amounts owed to a company constitute ‘circulating assets’ and how should they be distributed? This crucial question has not always been answered predictably in recent cases. The Court of Appeal’s decision in Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) [2023] NSWCA 118 has provided a framework for navigating the relevant principles in the context of a priority dispute over R&D tax refunds.
Key takeaways
The UK’s latest quarterly insolvency statistics have been published and, as predicted, continue to show a high rate of insolvencies, both in relation to pre-pandemic numbers and by comparison to last year’s Q1 results. The Q1 2023 statistics show a 18% increase in the overall number of registered company insolvencies from Q1 2022 and a 4% decrease from Q4 2022, with a total of 5,747 company insolvencies (seasonally adjusted) during this past quarter.
The UK's latest quarterly company insolvency statistics, published on 2 August, confirm the trends the restructuring community are seeing so far this year and are expecting to continue as we progress through the year.
The High Court has sanctioned the Part 26A restructuring plan of E D & F Man Holdings Limited (the Plan) on which Freshfields has advised the E D & F Man Group (the Group). The Plan represents the first full-scale financial restructuring to utilise cross-class cram-down in respect of a financial creditor class and to amend articles of association. This scenario represents the paradigm use case practitioners and commentators envisaged when Part 26A was introduced in 2020.
In the recent case of Stubbings v Jams 2 Pty Ltd [2022] HCA 6, the High Court has allowed an appeal relating to asset-based lending (ABL) and the enforceability of security associated with these loans. The High Court held that whilst asset-based lending itself is not unconscionable, certain conduct may render loans and security unenforceable. The decision is a reminder that lenders should ensure the circumstances of potential borrowers are fully scrutinised prior to lending.