In the recent decision In the Matter of Padma Fund L.P. (unreported, 8 October 2021) (Padma), Justice Parker found that the Grand Court of the Cayman Islands (Court) has no jurisdiction to wind up a Cayman Islands exempted limited partnership (ELP) on the basis of a creditors' petition. Instead, the Court found that an unpaid creditor must present a petition against the general partner (GP) of the ELP.
When used correctly, pre-pack administrations can be an effective means of creating an opportunity for the rescue of an insolvent business. However, concerns are regularly expressed about the lack of transparency in the sale process and the potential for poor outcomes for unsecured creditors, particularly where a disposal involves connected parties. These concerns have been exacerbated by some unfavourable media reports about a limited number of high-profile cases, and the speed at which transactions are often required to take place in order to preserve value and jobs.
The Insolvency Act 1986 (HMRC Debts: Priority on Insolvency) Regulations 2020 will apply to all business insolvencies that commence on or after 1 December 2020. They provide for certain debts owed to HM Revenue & Customs (HMRC) to become preferential debts in the event of a business entering a formal insolvency. It is important that creditors understand whether they are affected by these changes so that they can decide whether they need to take steps to protect their position.
The relevant debts
On 26 June 2020, the Corporate Insolvency and Governance Act[1] (the Act) came into force.
The Act has significant implications for supply contracts as it will prevent many suppliers ending existing contracts once a business is insolvent. The Act will make a big impact on existing supply contracts, and will also affect the drafting and negotiation of new contracts.
The (the "Act") obtained Royal Assent on 25 June 2020 and came into effect on 26 June 2020.
The Act is intended to offer protection to businesses that are having difficulties trading due to the current economic downturn and beyond, and generally marks a shift towards a more debtor-friendly regime. The provisions will be relevant to occupational pension schemes.
The Corporate Insolvency and Governance Act 2020 (the "Act") obtained Royal Assent on 25 June 2020 and came into effect on 26 June 2020.
The Act is intended to offer protection to businesses that are having difficulties trading due to the current economic downturn and beyond, and generally marks a shift towards a more debtor-friendly regime. The provisions will be relevant to occupational pension schemes.
The Corporate Insolvency and Governance Bill 2020 (the Bill) was published on 20 May 2020. Following completion of the Bill's third reading in the House of Commons, it is now proceeding through the House of Lords.
The (the Bill) was published on 20 May 2020. Following completion of the Bill's third reading in the House of Commons, it is now proceeding through the House of Lords.