In a second application heard on the same day, Hildyard J considered an application by the administrators of Lehman Brothers Europe Limited (LBEL) for directions that would enable a surplus to be distributed to the sole member of LBEL while LBEL remained in administration. The proposed scheme had material benefits for both shareholders and creditors. The administrators acknowledged that the orders sought were an indirect means of circumventing the Insolvency Act 1986 (UK), which does not expressly provide for directors to make distributions during an administration.
The Court of Appeal has recently dismissed an appeal from the High Court's judgment (discussed in our September 2016 update) setting aside a compromise under Part 14 of the Companies Act 1993 after finding that the challenging creditors, who had voted against the compromise, had been unfairly prejudiced by the decision to call only one meeting of creditors.
In Day v The Official Assignee as Liquidator of GN Networks Ltd (in Liq) [2016] NZHC 2400, the High Court rejected a claim that the funding arrangement at issue constituted maintenance or champerty.
On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance. In this briefing we consider the proposals and what it means for European insolvency and for the UK.
On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance (the Proposals).
What are the Proposals? The Proposals have three main parts:
This briefing covers Brexit implications of restructuring and insolvency, in particular it discusses the implications on the European Regulation on Insolvency Proceedings and recognition of insolvency judgments and how schemes of arrangement will be impacted by Brexit.
Summary
English insolvency law is about to change, making it harder for IT suppliers to stop supplying when a customer goes into an insolvency procedure. The aim is to help administrators and others to secure the supply of IT products and services that might be needed to rescue failing businesses.
Summary
We reported in December 2014 that the amendments to the EC Regulation on Insolvency Proceeding (the Recast Regulation) were virtually finalised and agreed between the various legislative organs of the European Union.
Finally after several years, the debate is now over and the European Parliament has now approved the final text – broadly as it was in December 2014. The outcome is good news for cross border corporate restructurings and insolvencies around Europe, but it will not come into force for over two years.
Next steps
Summary
The Court of Appeal’s judgment in The Trustees of the Olympic Airlines SA Pension & Life Insurance Scheme v Olympic Airlines SA [2013] EWCA Civ 643 has clarified what is required to fall within the definition of an ‘establishment’ for the purposes of the EC Insolvency Regulation (the Insolvency Regulation).
Summary
A recent court decision confirmed that transparent pre-pack sales can be used where they are in the best interests of the creditors as a whole. The court ruled that: