Sanctions regulations won't prevent administration orders but may affect timings and require undertakings

Unregistered and time-barred foreign judgments can found the basis of insolvency proceedings in England

The English High Court has ruled that unregistered and time-barred foreign judgments can found the basis of insolvency proceedings in England.

The threat of insolvency proceedings can be a strong form of leverage to obtain a successful outcome on enforcement of a judgment debt, as judgment debtors will often pay up when faced with the prospect of being found insolvent.

Foreign money judgments

The High Court recently issued its ruling in the matter of Re Avanti Communications Limited (in administration). It is the first major case since the pivotal 2005 House of Lords decision of Re Spectrum Plus  to examine the characteristics of fixed and floating charges.

Key points

The Supreme Court has handed down its long-awaited judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 25.

Basic facts

Debt exchanges have long been utilized by distressed companies to address liquidity concerns and to take advantage of beneficial market conditions. A company saddled with burdensome debt obligations, for example, may seek to exchange existing notes for new notes with the same outstanding principal but with borrower-favorable terms, like delayed payment or extended maturation dates (a "Face Value Exchange"). Or the company might seek to exchange existing notes for new notes with a lower face amount, motivated by discounted trading values for the existing notes (a "Fair Value Exchange").

One of the primary fights underlying assumption of an unexpired lease or executory contract has long been over whether any debtor breaches under the agreement are “curable.” Before the 2005 amendments to the Bankruptcy Code, courts were split over whether historic nonmonetary breaches (such as a failure to maintain cash reserves or prescribed hours of operation) undermined a debtor’s ability to assume the lease or contract.