In our April 2019 newsletter we reported on the High Court judgment in Mainzeal Property Construction Limited (in liq) & Ors v Yan & Ors [2019] NZHC 255. The directors were ordered to contribute $36m to Mainzeal’s assets to be distributed to creditors. The Court found that Mr Yan was the most culpable director and had induced the other directors to breach their duties.
Following the administration of Virgin Australia the lessors of four engines that were leased to Virgin served notice requiring delivery up of the engines to a nominated address in the USA. The administrators argued that their obligations to the lessors were met if they made the engines available for delivery up in Australia.
The Supreme Court of NSW in Citadel Financial Corporation Pty Ltd [2020] NSWSC 886 has made orders (in accordance with section 447A(2(b) of the Corporations Act 2001 (Cth)) to terminate a deed of company arrangement (DOCA) on grounds that entry into such DOCA was an abuse of the voluntary administration process.
The English High Court in Telnic Ltd v Knipp Medien Und Kommunikation GmbH [2020] EWHC 2075 (Ch) has confirmed that the court has discretion to restrain a winding-up petition against debtor's when the debt is governed by an arbitration agreement.
Knipp Medien Und Kommunikation GmbH (Knipp) appealed against an order to stay its winding-up petition against Telnic Limited (Telnic). Telnic also brought a cross-appeal seeking orders that Knipp's petition be dismissed rather than stayed.
Susheel Dutt has unsuccessfully appealed a decision of the Disciplinary Tribunal that he was guilty of unbecoming conduct, negligence or incompetence in a professional capacity and the suspension of his membership for a period of 18 months, highlighting the important role that insolvency practitioners play and the high standards expected of the profession.
As we discussed in our July newsletter, the Corporate Insolvency and Governance Act 2020 (CIGA 2020) has introduced a new Restructuring Plan, which is similar to existing Schemes of Arrangement. In essence a Court can sanction a restructuring plan which binds a dissenting class of creditors, if that class would be in no worse a position than the most likely alternative.
This was an application by the administrators of Lehman Brothers International (Europe) Ltd for a direction under paragraph 63 of Schedule B1 IA86 that they be at liberty to consent to a request from the company’s directors to distribute surplus funds to the company’s sole shareholder.
The Court has granted one of the first Winding Up Orders under CIGA 2020.
The winding up petition had been issued on 1 May 2020, 8 weeks before CIGA 2020 came in to force, but after 27 April 2020, the date from which CIGA 2020 applies retrospectively. As a result, the petitioner could not have ensured that the winding up petition satisfied the requirements of CIGA 2020, as those requirements were not in existence at the time that the petition was presented.
The liquidators of a subsidiary company had submitted a proof in the CVA of the parent company. The proof was based upon a claim under section 239 of the Insolvency Act 1986 (IA86) that certain payments by the parent to the subsidiary had amounted to unlawful preferences of the company. The liquidators appealed against the decision by the supervisor of the CVA to reject that proof.
Following the Insolvency Service’s announcement that it will produce monthly (as opposed to quarterly) company and individual statistics for England and Wales, to assist the Government and the insolvency sector in monitoring the impact of COVID19, the results for July showed that: