This case concerned the immunity of receivers from claims, where the Court had approved the sale of assets over which they were appointed.

Background

Following a dispute between two shareholders of Blackpool Football Club Limited (BFCL), receivers were appointed by the court over certain assets related to Blackpool Football Club, including the shares held by the majority shareholder in BCFL, Denaxe Limited (Denaxe).

During the marketing process, the receivers concluded the best way forward was to sell the assets as one complete package.

The German Federal Court of Justice (BGH) in its ruling of 12 January 2023 (IX ZR 71/22) clarifies the requirements for proving an 'intent to disadvantage creditors' that it established in its landmark ruling of 6 May 2021.

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.

A floating charge debenture holder has the advantage that they can enforce their security by appointing their choice of administrators. This is a powerful and useful tool for lenders but is subject to the caveat that the debenture has to be “qualifying”.

As far as they go, restructuring plans have worked well since they were first introduced 3 years ago. This is reflected in the most recent review of CIGA published by the Insolvency Service which reflects favourably on this new insolvency measure. However, there are still some barriers to its use.

The confluence of the COVID-19 pandemic, high inflation, and increased borrowing costs culminated in countries incurring record levels of debt.[1] Despite this global debt crisis, there is currently no comprehensive set of rules or body of law to govern the restructuring of sovereign debt.

The three year review of CIGA (the Corporate Insolvency and Governance Act) published by the Insolvency Service suggests that we might see changes to the corporate moratorium process – will these address concerns about the process and encourage more insolvency practitioners to recommend its use?

A company must apply for insolvency in Germany if it is either illiquid and/or over-indebted. Illiquidity must be confirmed where the debtor is not capable of meeting at least 90 % of all claims with its liquid assets within 3 weeks (section 17 of the German Insolvency Code).

Real estate assets – effect on liquidity

The Court of Appeal in Braunschweig has recently considered whether a debtor was insolvent due to illiquidity where it owned extensive real estate assets.

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.

Companies are under increasing pressure to examine their ESG policies, particularly after the recent COP26 conference. The UK's commitment to achieving net-zero emissions by 2050 has intensified the ESG focus.

What is ESG?

ESG, or Environmental, Social and Corporate Governance, is a term used to describe a set of standards that measures a business' environmental and social impact.

Why is ESG important in a distressed restructuring?