In a recent landmark cross border decision the Düsseldorf Higher Regional Court clarified that general managers cannot rely on their Directors and Officers Liability Insurance cover (D&O) in the event of a claim for repayment under Germany's "wrongful trading" legislation. 

Providing cover for the directors and officers of a company or the company itself, D&O insurance provides reimbursement in the event the insured suffers loss as a result of legal action brought for alleged wrongful acts of the directors and officers.  

On 26 August the UK Government announced its intention to introduce radical reforms to insolvency law in the catchily named consultation paper "Insolvency and Corporate Governance – Government Response". Despite the 82 pages, the government kept their cards relatively close to their chest choosing not to reveal their big plans but with suggestions about the reforms ahead to "enable more companies not only to survive, but to thrive".

The Department for BEIS has recently published a consultation to the UK's insolvency and corporate governance landscape including significant proposals to extend the liability of directors of holding companies that sell insolvent subsidiaries. 

This recent Court of Appeal decision has provided clarity on the justification for the rules against bringing claims for reflective loss and confirmed that both unsecured creditors and shareholders are similarly barred from bringing such claims.

Background

The Hong Kong Court have confirmed for the first time that a foreign voluntary liquidation is eligible for common law recognition and assistance in Hong Kong.

China Culture Media International Holdings Limited, incorporated in the BVI, was wound up on 9 May 2016. China Culture was the sole shareholder of Supreme Tycoon Limited, also incorporated in the BVI.

Consider the common commercial loan collection situation: a business debt collateralized by relatively permanent collateral (real property or durable non-mobile equipment such as a printing press) and transient collateral (inventory, accounts receivable and cash).[1] Frequently, there is also potentially recoverable unsecured debt because the collateral is insufficient to pay the entire debt and (a) the collateral does not include all the borrower’s

In an urgent application, the Court of Appeal held that a CVA should be precluded from becoming effective where an unanticipated claim of €126.7m was submitted after the CVA was approved but before the statutory bar on new claims had lapsed.

The Judgment handed down by the Court of Appeal in Orexim Trading Ltd v Mahavir Port And Terminal Private Ltd (formerly known as Fourcee Port and Terminal Private Ltd) [2018] EWCA Civ 1660, [2018] All ER (D) 101 (Jul) on 13 July 2018 provided important clarification as to the service of claims under s.423 of the Insolvency Act 1986 ("IA 1986") out of the jurisdiction.

The Facts

A lawyer’s usual task is to help solve the client’s current problem: resolve a dispute; close a loan; obtain a permit; avoid a conviction; etc. Lawyers are so task oriented that some consultants advise us to have task specific engagement understandings and send dis-engagement letters when a task is complete. For bankruptcy lawyers representing individuals in a Chapter 13 bankruptcy, the task at hand is getting clients to and through a confirmed Chapter 13 plan with the promised debt relief and fresh start.

Lawyers representing creditors often compete with federal government claims against the same insolvent borrower/debtor. There are several common federal statutes that impact these disputes including: 11 U.S.C. Section 507[1]; 26 U.S.C. Section 6321[2], et seq.; and 31 U.S.C.