Two recent Supreme Court of Canada decisions demonstrate that the corporate attribution doctrine is not a one-size-fits-all approach.
The German Federal Court of Justice (the Federal Court) has considered whether a so-called "weak" preliminary insolvency administrator, entrusted to continue business operations with the management during the preliminary proceeding, may take actions in the interest of these operations, where it is unclear whether the debtor has discontinued the business.
Background
According to the German Federal Court of Justice (the Court), a “related party” (nahestehende Person) within the meaning of German insolvency law includes in the case of a legal entity, an indirect shareholder, provided that it holds more than 25% of the shares. Here, the Court will assume that the legal entity has advance knowledge of the financial situation of its subsidiary.
Background
Court approval of a sale process in receivership or Bankruptcy and Insolvency Act (“BIA”) proposal proceedings is generally a procedural order and objectors do not have an appeal as of right; they must seek leave and meet a high test in order obtain it. However, in Peakhill Capital Inc. v.
In a recent case before the Federal Court of Justice, an insolvency administrator was found to have neglected his duties of investigation in a particularly serious and reproachable manner.
Decision
The insolvency administrator had contested the offsetting of an investment subsidy by the creditor bank to balance the debtor’s accounts.
The focus of the decision was whether the insolvency administrator had made the contestation claim within the statutory limitation period. In Germany, this is usually three years and starts:
The High Court has reaffirmed the test to be applied in considering an application to dismiss a bankruptcy summons grounded on a judgment.
The bankruptcy process in Ireland involves multiple steps and the debtor can seek to bring it to a halt at each step. Debtors often seek to rerun effectively the same arguments at each step, ignoring previous findings by the courts. One such step is an application to dismiss a bankruptcy summons.
Where a creditor believes that a debtor is insolvent, any “third-party application” that it makes for the insolvency of the debtor must be well substantiated.
Decision
The District Court of Hamburg recently considered an application for insolvency on grounds of illiquidity due to default in social security contributions.
A landmark decision of the German Federal Court (13 June 2006 – IX ZB 238/05) held that the illiquidity of a company could be assumed where it was in default for more than six months of social security contributions.
Der Bundesgerichtshof (BGH) hat am 29. Juni 2023 entschieden, dass ein Rechtsanwalt wegen Beratungsfehlern zu Zahlungen nach Insolvenzreife gegenüber dem Geschäftsführer haften kann, auch wenn er das Unternehmen und nicht die/den Geschäftsführer persönlich berät (IX ZR 56/22, ZInsO 2023, 1642).
The Irish High Court has determined that the liquidation of an Irish aircraft leasing company, which was a 100% subsidiary of a Russian company expressly subject to EU sanctions, rebuts the presumption that the company was controlled by the Russian parent for the purpose of EU sanctions.
This enables the liquidators to deal with the assets without costly and time-consuming derogation applications.
Background
It is no secret anymore that the MiCA (Markets in Crypto-Assets Regulation) is coming. But why is this important for insolvency practitioners and clients? This update aims to give an answer to this question and to provide an outlook on how the German legislator plans to implement these principles.