Over the Bank holiday weekend, the UK government announced that it intends to introduce new legislation to implement certain measures (detailed below) as soon as parliamentary time permits.

The High Court yesterday held that a Chairperson of a shareholder scheme meeting may reject votes cast against a scheme of arrangement in circumstances where the shares were acquired through an artificial share-splitting exercise designed to frustrate the scheme. It is the first English case to consider this issue and while it arose in the context of a shareholder scheme, the impact is also significant for debt restructurings implemented by way of a creditor scheme of arrangement.

Background

On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance. In this briefing we consider the proposals and what it means for European insolvency and for the UK.

On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance (the Proposals).

What are the Proposals? The Proposals have three main parts:

Summary

Third parties associated with an employer may find themselves liable to contribute to the employer's occupational pension scheme. Where a pension scheme is in deficit, the Pensions Regulator has powers - so-called 'moral hazard' powers - that can require a third party to give financial support or a specific payment to the pension scheme.

On January 25, 2016, the Romanian court handling the bankruptcy proceeding of Astra SA extended the deadline to file court claims against Astra SA to 17 February 2016. The initial deadline for filing was 18 January 2016. Creditors of Astra SA may wish to avail themselves of this extended deadline to file such claims in order to recover some or part of the amounts owed to them by Astra SA in the bankruptcy/liquidation proceedings.

Summary

We reported in December 2014 that the amendments to the EC Regulation on Insolvency Proceeding (the Recast Regulation) were virtually finalised and agreed between the various legislative organs of the European Union.

Finally after several years, the debate is now over and the European Parliament has now approved the final text – broadly as it was in December 2014. The outcome is good news for cross border corporate restructurings and insolvencies around Europe, but it will not come into force for over two years.

Next steps

Pursuant to the issuing by the Romanian government of Government emergency ordinance no. 91/2013 on the Insolvency Code, Ordinance that has been declared unconstitutional by the Romanian Constitutional Court in October 2013, Romanian Parliament adopted a new Insolvency Law (“New Law”), maintaining some of the valuable provisions of the unconstitutional Ordinance. 

Snapshot

The Court of Appeal’s judgment in Jervis v Pillar Denton Limited (Game Station) [2014] EWCA Civ 180 on 24 February 2014 has brought welcome clarity to when rent qualifies as an administration expense.

The Court of Appeal has ruled that:

The Romanian government has adopted, by means of Government emergency ordinance no. 91, the Insolvency Code. The Code gathers and amends all pre-insolvency and insolvency provisions in Romanian legislation relating to companies, groups of companies, credit institutions, insurance and reinsurance companies, as well as cross-border insolvency proceedings. It will enter into force on October 25, 2013 and will also apply to already ongoing insolvency proceedings.

Summary

On 24 July 2013, the Supreme Court handed down its long-awaited judgment in the Nortel/Lehman case: Re Nortel Companies [2013] UKSC 52. The Court looked at the position where a contribution notice (CN) or financial support direction (FSD) was issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings in England (eg administration). How does the relevant obligation rank in the order of priority of payment?