On 31 October 2023, Federal Law No. 51 of 2023 Promulgating the Financial and Bankruptcy Law (the Bankruptcy Law) was published in the United Arab Emirates (UAE) Official Gazette, repealing the prior federal law on bankruptcy (Federal Law No. 9 of 2016, the Prior Law) and significantly developing the bankruptcy regime in the UAE.
In Hunt v Singh, the Court referred to the Supreme Court's landmark decision in BTI v Sequana (see our alert) in deciding when the directors' duty to creditors arose.
Background
Marylebone Warwick Balfour Management Limited (the Company), entered a tax avoidance scheme between 2002 and 2010 which the directors, on professional advice, believed to be valid.
On 5 July 2023 the Court sanctioned Prezzo Investco Ltd's (Prezzo) restructuring plan despite strong opposition by UK tax authority, HMRC.
HMRC has taken a more active approach to opposing restructuring plans and was successful in blocking the plans recently proposed by GAS and Nasmyth (see our alert).
The English Court of Appeal has widened the scope of transactions defrauding creditors under section 423 of the Insolvency Act 1986 in a recent case, Invest Bank PSC v El-Husseini and others (Invest Bank).
Under s.423, the court will only make an order if it is satisfied that a transaction at an undervalue was entered into by a debtor for the purpose of putting assets beyond the reach of a person who may make a claim against them or otherwise prejudicing their interests in relation to such claim.
The English tax authority, HMRC, has successfully challenged the restructuring plans put forward by The Great Annual Savings Company Limited (GAS) and Nasmyth Group Limited (Nasmyth).
This is the first time that HMRC has actively challenged restructuring plans at the sanction hearing. The key takeaways from the judgments:
Nasmyth
The insolvency statistics released for March 2023 demonstrate the impact of turbulent trading climates on UK businesses, in particular soaring costs and decreased consumer spending.
The March 2023 insolvency statistics show that UK corporate insolvencies have risen 16% year-on-year and 38% since February 2023.
The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
Background
Background
Decision
Key takeaways
The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
Background
Mizen Design/Build Ltd's (Mizen) directors proposed a CVA stating that this would lead to a better result for unsecured creditors than the likely alternative, administration.
The CVA compromised guarantee creditors' ability both to bring a claim against Mizen and to call upon their performance guarantees against Mizen's parent company (the Parent Guarantor).
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