Fulltext Search

On 18 September 2025, the Chancellor of the High Court, the Rt. Hon. Sir Julian Flaux announced the long-awaited publication of the updated Practice Statement in relation to schemes of arrangement and restructuring plans (the "New Practice Statement"). Revision of the existing Practice Statement was, in large part, driven by the rise in contested schemes and restructuring plans which, in turn, has put significant pressure on the Court system.

Liability management transactions which may favour a subset of creditors over another are increasingly common in the US leveraged finance markets. 2024 may be seen as the year in which these US imports began to make a real impact in Europe. Which strategies could creditors employ to protect themselves from unfavourable treatment where such transactions are attempted?

In the current market, investors are increasingly considering their options in relation to the stressed and distressed credits in their portfolios. Whilst mindful of stakeholder relationships, secured lenders may, in some circumstances, wish to consider the "nuclear option": enforcing their share pledge over a holding company of the operating group (ideally, such pledge being over a single company which directly or indirectly holds the entire business - a "single point of enforcement").

In a recent case, the Victorian Supreme Court said that an accountant ‘would know well that a statutory demand involves strict time frames for response and potentially very significant consequences for a company’. The accountant failed to take appropriate steps to inform the company of the statutory demand.

The statutory demand process

If a company does not comply with a statutory demand within 21 days of service, it is deemed to be insolvent and the creditor may proceed to wind up the company.

A recent court decision considers the legal principles and sufficiency of evidence when a court-appointed receiver seeks approval of their remuneration.

A court-appointed receiver needs court approval for the payment of their remuneration. The receiver has the onus of establishing the reasonableness of the work performed and of the remuneration sought.

Earlier this year, the English Court refused to sanction two Part 26A restructuring plans ("RPs") which sought to bind HMRC, the UK tax authority, into restructurings via "cross-class cram down".

Introduction

The UK Supreme Court has recently delivered a landmark decision in the case of BTI 2014 LLC v Sequana S.A. [2022] UKSC 25. The decision is of great importance as the Supreme Court considered in detail whether the trigger for the directors’ duty to consider creditors’ interest is merely a real risk, as opposed to a probability of or close proximity to, insolvency.

Background

簡介

英國最高法院最近在BTI 2014 LLC v Sequana S.A. [2022] UKSC 25一案中頒下了重要裁決,其重要之處在於最高法院深入探討了董事考慮債權人權益的責任,是只需出現真正的無力償債風險便已觸發,還是在相當可能或瀕臨無力償債時才觸發。

背景

本案的第二及第三答辯人為AWA公司(「該公司」)的董事。於2009年5月,他們安排該公司向該公司唯一股東(「第一答辯人」)派發1.35億歐元的股息(「該股息」),以抵銷第一答辯人結欠該公司的債務。該公司在支付該股息時,其資產負債表及現金流均處於具償債能力的狀況。然而,該公司有一項與污染相關而金額未定的長期或然負債,導致該公司產生未來可能無力償債的真正風險。

简介

英国最高法院最近在BTI 2014 LLC v Sequana S.A. [2022] UKSC 25一案中颁下了重要裁决,其重要之处在于最高法院深入探讨了董事考虑债权人权益的责任,是只需出现真正的无力偿债风险便已触发,还是在相当可能或濒临无力偿债时才触发。

背景

本案的第二及第三答辩人为AWA公司(「该公司」)的董事。于2009年5月,他们安排该公司向该公司唯一股东(「第一答辩人」)派发1.35亿欧元的股息(「该股息」),以抵销第一答辩人结欠该公司的债务。该公司在支付该股息时,其资产负债表及现金流均处于具偿债能力的状况。然而,该公司有一项与污染相关而金额未定的长期或然负债,导致该公司产生未来可能无力偿债的真正风险。

Rises in energy costs, disruption to global supply chains, the situation in Ukraine, soaring inflation and higher interest rates are pushing several major European economies towards recession. Borrowers and issuers in the leveraged loan and high yield markets are feeling the impact and the benign refinancing conditions of 2021 are long gone. The natural consequence is rising default rates – S&P's global corporate default count for 2022 surpassed 2021's year-to-date tally during September.