On 23 January 2024, the English Court of Appeal set aside the April 2023 order of the High Court sanctioning the English Part 26A restructuring plan (the “Plan”) proposed by AGPS BondCo plc (the “Plan Company”), a subsidiary of Adler Group SA (Adler Group SA and its subsidiaries being the "Adler Group"). The successful appeal was brought by an ad hoc group of holders of the Adler Group's 2029 notes (the "AHG"). The practical consequences of this decision for the Adler Group's restructuring remain to be seen.

Nostrum Oil & Gas PLC’s scheme of arrangement under Part 26 of the Companies Act 2006 (the “Scheme”) was sanctioned on 26 August 2022, with the “scheme effective date” occurring on 31 August 2022.

Judgment has been reserved on the sanction of Houst Ltd’s restructuring plan at a hearing held in front of Zacaroli J on Friday morning (15 July 2022), while the company gathers the further valuation information requested by the court. If sanctioned, the plan will be the first use of the restructuring plan by an SME, and will involve a “cram” of HMRC notwithstanding the tax authority’s secondary preferential creditor status.

The proposed plan

One difficulty encountered by creditors and trustees in bankruptcy is the use of one or more aliases by a bankrupt. Whether it is an innocent use of a nickname or an attempt to conceal one's identity, the use of an alias can often create problems for creditors seeking to pursue debts and for trustees seeking to recover assets held by a bankrupt.

How does it happen?

On 8 October 2020, the Insolvency Service published the outcome of its review of industry reforms to pre-pack sales in administration and made recommendations which will impact the way in which pre-pack sales to connected parties in particular operate in the UK in the future.

Speed read

As concerns about illegal phoenix activity continue to mount, it is worth remembering that the Corporations Act gives liquidators and provisional liquidators a powerful remedy to search and seize property or books of the company if it appears to the Court that the conduct of the liquidation is being prevented or delayed.

When a person is declared a bankrupt, certain liberties are taken away from that person. One restriction includes a prohibition against travelling overseas unless the approval has been given by the bankrupt's trustee in bankruptcy. This issue was recently considered by the Federal Court in Moltoni v Macks as Trustee of the Bankrupt Estate of Moltoni (No 2) [2020] FCA 792, which involved the Federal Court's review of the trustee's initial refusal of an application by a bankrupt, Mr Moltoni, to travel to and reside in the United Kingdom.

What makes a contract an unprofitable contract which can be disclaimed by a trustee in bankruptcy without the leave of the Court under section 133(5A) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act)? Can a litigation funding agreement be considered an unprofitable contract when the agreement provides for a significant funder's premium or charge of 80% (85% in the case of an appeal)?

In a recent decision, the Federal Court of Australia declined to annul a bankruptcy in circumstances where the bankrupt claimed the proceedings should have been adjourned given his incarceration and solvency at the time the order was made: Mehajer v Weston in his Capacity as Trustee of the Bankrupt Estate of Salim Mehajer [2019] FCA 1713. The judgment is useful in reiterating what factors the Court will consider when deciding whether to order an annulment under section 153B(1) of the Bankruptcy Act 1966 (Cth) (the Act).

Generally, once a company enters into liquidation, litigation against that company cannot be commenced or be continued without the leave of the Court (Corporations Act 2001, s 471B). However, occasionally a liquidator may cause a company to commence or defend litigation after the commencement of the winding up. What happens if the company in liquidation is unsuccessful in that litigation and is subject to an adverse cost order? How will such an adverse cost order rank amongst other competing creditors?

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