The Government has published the COVID-19 Response (Further Management Measures) Legislation Bill (the Bill), an omnibus bill containing amendments (both temporary and permanent) to several acts. These amendments aim to both assist organisations in effectively managing the “immediate impacts of the response to COVID-19”, as well as mitigating some of the pandemic’s “unnecessary and potentially longer-term impacts on society”.

High Court provides guidance on voluntary administration and creditors’ meetings under COVID-19 Alert Level 4

A recent decision of the High Court provides helpful guidance for insolvency practitioners on how aspects of the voluntary administration regime should operate in the context of the COVID-19 pandemic.

Christchurch based company Cryptopia Limited (in liquidation) (Cryptopia) operated a cryptocurrency exchange. Account holders were able to deposit cryptocurrencies into the exchange, and carry out trades with each other.

In January 2019 the exchange was hacked and cryptocurrencies valued at approximately NZD30m were stolen. Cryptopia closed after the hack, re-opened for a short period, and was then placed into insolvent liquidation in May 2019. David Ruscoe and Russell Moore of Grant Thornton New Zealand were appointed liquidators.

A recent decision of the High Court of New Zealand provides helpful guidance for insolvency practitioners on how aspects of the voluntary administration regime should operate in the context of the COVID-19 pandemic.

On 30 March 2020, the board of directors of EncoreFX (NZ) Limited resolved to appoint administrators to the company. By then, New Zealand was already at Level 4 on the four-level alert system for COVID-19.

Introduction

On Saturday (28 March 2020) the UK Government announced certain changes to insolvency laws in response to COVID-19, intended to help companies and directors.

There are two aspects to the changes:

Introduction

The decision of ICC Judge Barber in the case of Stephen Hunt & System Building Services Group Limited -v- Brian Michie & System Building Services Group Limited [2020] EWHC 54 (Ch) was recently handed down and it is an interesting decision about directors’ duties post the appointment of an administrator or liquidator.

Facts

The facts are quite involved and matter specific, and gave rise to a number of issues, but for present purposes the key issues are as follows.

Pension Schemes Bill – Additional hurdle for English law restructurings?

The intention was that the Pension Schemes Bill would enhance the Pensions Regulator’s powers to respond earlier when employers fail to take their pension responsibilities seriously, targeting “reckless bosses who plunder people’s pension pots”. However, the new criminal offences proposed as part of the Bill may inadvertently create additional hurdles for English law restructurings, making them potentially more expensive and difficult.

The UK Court of Appeal has held that legal privilege outlasts the dissolution of a company in Addlesee v Dentons Europe LLP [2019] EWCA Civ 1600.

Legal advice privilege applies to communications between a client and its lawyers. The general rule is that those communications cannot be disclosed to third parties unless and until the client waives the privilege.

In Secretary of State for Business, Energy and Industrial Strategy v PAG Asset Preservation Ltd [2019] EWHC 2890 the Secretary presented petitions under s 124A of the Insolvency Act 1986 to wind up two companies on public interest grounds. These companies were PAG Asset Preservation Limited and MB Vacant Property Solutions Limited (the Companies).

The Privy Council has rejected an attempt to block a cross-border liquidation on procedural grounds in UBS AG New York v Fairfield Sentry [2019] UKPC 20.