Summary

For the first time, the court has exercised its power under s. 901C(4) Companies Act 2006 to exclude a company’s members and all but one class of its creditors from voting on a restructuring plan under Part 26A. The court was satisfied that only one class of creditors had a genuine economic interest in the company and noted that “this was not a marginal case”.

Key drivers for the court’s decision (see more detail below) were:

The National Security and Investment Act 2021 (the Act) comes into force on 4 January 2022. The Act sets out the UK’s new national security screening regime. The Act replaces, and significantly extends, the UK government’s power to investigate and intervene in transactions which pose, or could pose, threats to the UK’s national security (see our earlier related blog post).

A new Act, which received Royal Assent on 15 December 2021, extends the existing directors’ disqualification regime to the directors of dissolved companies.

In August 2021, Sir Alistair Norris sanctioned the restructuring plan of Amicus Finance PLC (Amicus) (as we wrote about at the time). On 15 November 2021, the judge handed down his reasoning for sanctioning the plan.

Background

The High Court has rejected a landlord's challenge to the Caffè Nero CVA, giving support to the ongoing usefulness of CVAs in high street restructurings. The case raised issues around the use of the electronic decision procedure set out in the Insolvency Rules for CVAs, nominee and director decision-making during the CVA process, CVA modifications and provision of information to CVA creditors.

Background

As part of the overall scaling down of the COVID-19 support provided to UK businesses, the UK government has announced changes to the regime for winding-up petitions, with effect from 1 October – withdrawing, at least in part, some of the protections currently afforded to businesses.

Current position

Hughes, in the matter of Substar Holdings Pty Ltd (in liquidation) (No. 2) (Substar No. 2) considers the Court’s discretionary power to terminate the winding up of a company pursuant to s 482(1) of the Corporations Act 2001. Substar No. 2 follows the decision of Hughes, in the matter of Substar Holdings Pty Ltd (in liquidation) [2020] FCA 1863(Substar (No. 1), which considered the extent to which liquidators can realise trust assets when a corporate trustee enters into liquidation.

The Federal Court’s recent decision in Kellendonk concerned a $350,000 loan made by the applicants, Mr and Mrs Kellendonk, to Ms Maria Jasienska-Dudek to help her buy a property in Midland, Western Australia (Property). Ms Jasienska-Dudek defaulted under the loan agreement and the parties subsequently entered an informal agreement which, after Ms Jasienska-Dudek became a bankrupt, led to some novel circumstances and a novel application of section 133 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act).

Cross-border insolvency has ventured into new territory as a judgment is released from the first contemporaneous sitting of the Federal Court of Australia and the High Court of New Zealand.

On 28 June 2021, the UK High Court declined to sanction Hurricane Energy Plc’s restructuring plan. This was the first time a restructuring plan seeking to achieve a debt-for-equity swap against the wishes of existing shareholders had come before the court.

Background