Introduction
Go-To Guide:
The Grand Court of the Cayman Islands has provided further helpful guidance to insolvency practitioners as to the circumstances in which leave will be granted to commence or continue proceedings against a company in liquidation. Adenium Energy Capital Limited (in official liquidation) (Adenium) is the latest in a line of cases in the Cayman Islands in which leave has been sought to commence proceedings under s 97(1) of the Companies Act against a Cayman Islands-incorporated company in liquidation.
The Cayman Islands Court of Appeal has recently delivered helpful clarification on the principles which apply with respect to security for costs when the official liquidators of an insolvent fund seek to bring claims against its former management. Where it is clear to the Court that a defendant was responsible for management decisions immediately before a company entered insolvency, the Court may exercise its discretion, notwithstanding the impecuniosity of the plaintiff company, not to order payment of security for costs.
In a hearing yesterday, 6 April 2022, the High Court considered an application of the directors of VTB Capital PLC (VTB UK) for the appointment of Teneo Financial Advisory Limited as administrators.
In what Mr Justice Fancourt described as “an unusual case in all sorts of ways”, the English High Court was faced with a number of questions relating to how the UK’s insolvency regime can interact with the sanctions packages introduced in response to Russia’s invasion of Ukraine.
Despite a valuation fight, the Senior Lenders primed by Super Senior Debt in RP1 have had their debt written off in full in RP2 without even being given the opportunity to vote on the latter restructuring plan.
The case emphasizes that it is not enough for junior creditors to send letters to the court objecting to the RP and then expect the court to argue their case for them. In the words of Lord Justice Snowden, “they must stop shouting from the spectators’ seats and step up to the plate”.
An analysis of the UK’s corporate rescue tools: The Company Voluntary Arrangement, the Scheme of Arrangement and the Restructuring Plan.
When it comes to options for the rescue of a distressed UK corporate, there had for a very long time been a growing mood of regret amongst practitioners that there was no comprehensive restructuring tool. That all changed with the introduction of the Restructuring Plan (RP).
But, as with all things new, the evitable question is: what happens to the old?