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Directors’ duties: new statutory duties to have regard to the interests of creditors

The European Union (Preventive Restructuring) Regulations 2022 have amended the Companies Act 2014 so as to require for the first time in statute that directors of companies unable, or likely to be unable, to pay their debts, must have regard to the interests of creditors.

European Union, Ireland, United Kingdom, Company & Commercial, Insolvency & Restructuring, Arthur Cox LLP, Insolvency
Hertz Leaves Bankruptcy, Taps Directors for New Board

With Hertz emerging from a bankruptcy with a positive result for shareholders, we are reminded of the interplay between the equity markets and the bankruptcy alternative.

Some firms facing financial challenges during the pandemic were able to avoid a bankruptcy filing altogether because of their ability to raise the necessary funds through an equity offering. Hertz provides an example of a situation where the bankruptcy filing instead of wiping out the equity enhanced value.

USA, Company & Commercial, Insolvency & Restructuring, Mintz
Liquidation of Irish Bank Resolution Corporation and exchange of promissory notes

Irish Bank Resolution Corporation Act and Appointment of Special Liquidators

In the early hours of 7 February 2013, the Irish Bank Resolution Corporation Act 2013 (the “IBRC Act”) was passed. The IBRC Act provides for the Minister for Finance to make a “Special Liquidation Order”  (“SLO”) winding up IBRC. As a result of the SLO:

Ireland, Banking, Insolvency & Restructuring, Arthur Cox LLP, Liability (financial accounting), Liquidation, Central Bank of Ireland, Minister for Finance (Ireland)