New rules in the UK allow Companies House to share non-public information with insolvency officeholders and the Official Receiver.

While in many cases there may be limited non-public information available from Companies House that will be useful to insolvency officeholders, this is another tool available to deploy in appropriate cases. It is specifically envisaged to assist officeholders pursuing claims for fraudulent and wrongful trading, transactions at an undervalue and preferences.

Following a series of important decisions in England and across Europe, it is now beyond doubt that court-based restructuring processes should be approached from the outset as pieces of litigation.

We have seen increasingly sophisticated challenges to restructurings, which the courts are willing to accommodate. In appropriate cases, the courts have also refused to sanction restructurings.

The Irish High Court has determined that the liquidation of an Irish aircraft leasing company, which was a 100% subsidiary of a Russian company expressly subject to EU sanctions, rebuts the presumption that the company was controlled by the Russian parent for the purpose of EU sanctions.

This enables the liquidators to deal with the assets without costly and time-consuming derogation applications.

Background

On 16 May 2023, Mr Justice Adam Johnson in the High Court refused to sanction the restructuring plan proposed by The Great Annual Savings Company Limited (GAS) following objections from HMRC.

On 30 March 2022, the English court sanctioned the most recent restructuring plan proposed by Smile Telecoms Holdings Limited (Smile).

A recent England and Wales High Court decision demonstrates the increasingly litigious nature of Court-supervised restructuring processes. It also addresses the Court’s approach to whether foreign recognition risks represent a ‘blot’ on a proposed scheme of arrangement so that the Court should decline sanction ('the recognition/blot question').

The recent restructuring of the Norwegian Group by the Irish High Court helpfully clarifies the application of the Cape Town Convention in Irish restructuring. It is also an interesting case study regarding the circumstances in which the Irish courts will restructure a group of companies, which is not headquartered in Ireland.

In May 2017, the Irish Government signed a commencement order giving immediate effect to the ‘Alternative A’ insolvency remedy of the Aircraft Protocol to the Cape Town Convention on International Interests in Mobile Equipment (the Convention). The long-awaited implementation of ‘Alternative A’ gives force of law in Ireland to a regime which is similar to the insolvency regime in the USA, known as Chapter 11 “reorganisation” bankruptcy. The insolvency remedies in the Convention were designed to strengthen creditor’s positions.

In positive news for financiers and lenders, the Irish Government has signed an order which gives immediate effect to the “Alternative A” insolvency provisions of the Cape Town Convention.

The Supreme Court has held that a floating charge, crystallised by notice, prior to the commencement of a winding up, ranks ahead of preferential creditors. However, the Court expressed the view that the relevant legislation needs to be amended to reverse the “undoubtedly unsatisfactory outcome”.

Background