Introduction

Two shareholders of KBBO have obtained recognition in the English High Court of their Abu Dhabi bankruptcy process.

Key Takeaways

In welcome news for insolvency practitioners, the Supreme Court has limited the circumstances in which a dissatisfied bankrupt will have standing to challenge a trustee in bankruptcy's decisions or actions under section 303(1) of the Insolvency Act 1986 (Act), to those where there is likely to be a surplus in the bankruptcy estate (subject to only very limited exceptions). The Supreme Court acknowledged that, while this decision is about bankruptcy, the reasoning will also apply to challenges to liquidators' decisions under section 168(5) of the Act.

In welcome news for insolvency practitioners, the Supreme Court has limited the circumstances in which a dissatisfied bankrupt will have standing to challenge a trustee in bankruptcy's decisions or actions under section 303(1) of the Insolvency Act 1986 (Act), to those where there is likely to be a surplus in the bankruptcy estate (subject to only very limited exceptions). The Supreme Court acknowledged that, while this decision is about bankruptcy, the reasoning will also apply to challenges to liquidators' decisions under section 168(5) of the Act.

The restructuring market has been eagerly anticipating the judgments in the New Look and Regis CVA challenges. The New Look judgment was handed down on 10 May 2021 and the Regis Judgment followed on 17 May 2021. This article briefly sets out the issues in the New Look CVA challenge, the decision of Mr Justice Zacaroli and what this means for the future of CVAs.

Overview of the New Look CVA Challenge

The claim brought by the Applicants (a consortium of compromised landlords) can be summarised briefly under three heads of claim:

Long-awaited law reform to bring Australia's insolvency regime into step with many of its trading counterparts is slated to be enacted in the second half of 2017. The text of the law is currently before parliament for debate. If passed, Australia will see:

The Australian government has released draft legislation which proposes significant legislative change to insolvency laws in Australia. One of the changes proposed, is that directors will not be liable for insolvent trading in certain circumstances where the company is undertaking a restructure.

Under the proposed safe harbour reform, directors will not be liable for debts incurred whilst the company is insolvent if they can show that:

The increase in the availability of alternate capital in Australia over the past decade has provided a landscape for well-tested global restructuring techniques to be applied locally. This includes 'loan to own' strategies.