The long-awaited revamp of UK insolvency and corporate governance law has introduced significant changes to the effectiveness of termination on insolvency clauses in supply contracts.

The long-awaited revamp of UK insolvency and corporate governance law will introduce significant changes to the effectiveness of termination on insolvency clauses in supply contracts.

Delaware’s Bankruptcy Court has recently issued two insightful opinions that impact a creditor’s ability to establish the “receipt” element of a valuable 503(b)(9) administrative expense priority claim.

In an era when goods or materials often originate from suppliers or manufacturers outside the United States, bankruptcy courts are grappling with when “receipt” of goods occurs for the purpose of 503(b)(9) claims.

Many creditors who have supplied goods to a debtor before a bankruptcy case begins think their only prospects for recovery will be pennies on the dollar. While often times, pre-petition claims are relegated to receive small, if any, distributions, there is a unique carve-out in Section 503(b)(9) of the Bankruptcy Code that elevates “goods” supplied in the 20 days before a bankruptcy filing to administrative expense status.

Lenders and secured creditors often require that debtor-customers direct all receivable collections into a lockbox, hoping to wrangle any available proceeds to apply to their debtors’ outstanding debt. In requiring a debtor or its customer to remit payments to a lockbox, however, creditors may be overlooking a potential source of significant liability. A creditor using a lockbox may unwittingly expose itself to greater risk and liability than just a debtor’s default if it receives funds that were collected as sales tax on a debtor’s goods or services.

Where an Administrator makes employees redundant ahead of a sale of the business, will it always be a dismissal connected with a transfer (and therefore automatically unfair), or can it ever be for "economic, technical or organisational" (ETO) reasons (and therefore potentially fair)? In Crystal Palace FC Ltd –v- Kavanagh & ors [2013] EWCA Civ 1410, the Court of Appeal found for the latter, a more pragmatic, approach. Motivation, it appears, is everything in such cases. 

The role of Jersey as a financial centre means that on occasions there will be a requirement for a foreign liquidator or an office-holder under bankruptcy legislation to obtain information or documentation from persons or companies located in the Island. There have been a series of recent court decisions establishing the appropriate levels of co-operation with other jurisdictions.

A Jersey company or one of its creditors may wish the company to be placed into administration in England under Schedule B1 of the UK's Insolvency Act 1986 (the "Act").

A Jersey company or one of its creditors may wish the company to be placed into administration in England under Schedule B1 of the UK's Insolvency Act 1986 (the "Act").