Since the pandemic, during which insolvency rates were low due to Government measures, there has been a considerable rise in insolvencies in the UK and many other jurisdictions. High interest rates have significantly increased the cost of borrowing and many companies are saddled with mountains of debt that was taken out in better times and which are now difficult to repay. In addition, high inflation and energy costs, lower consumer confidence and volatile supply chains have all contributed to making the last few years very difficult for businesses.

Last month the Delaware Chancery Court sent a clear message to Delaware companies that failure to strictly comply with the Delaware Assignment for the Benefit of Creditors (“ABC”) statute will result in severe consequences, including dismissal.

The adage ‘there is no such thing as a free lunch’ rings true for the 831 company directors disqualified in 2023/24 for abusing the Covid financial support scheme.

The UK Financial Conduct Authority (FCA has issued a consultation about proposed changes to its Guidance for Insolvency Practitioners. The aim is to clarify existing guidance and provide more information to insolvency practitioners (IPs) on how to deal with regulated firms.

In my most recent blog post, I provided some tips for creditors who find themselves in the Subchapter V arena. This is somewhat of a follow-up to that one.

As discussed in our prior blog entitled “New York’s Sovereign Debt Restructuring Proposals,”[1] three bills were introduced in the New York state legislature to overhaul the way sovereign debt restructurings are handled in New York. Those bills sought to implement a comprehensive mechanism for restructuring sovereign debt, limit recovery on certain sovereign debt claims, and amend the champerty defense.

As seen in the recent proliferation of bankruptcy cases seeking a structured dismissal or conversion after a successful sale, debtors constantly seek creative and efficient ways to wind up a case, including through a traditional plan of liquidation. Yet, as discussed below, debtors must ensure that any proposed voting procedures for a plan comply with section 1126 of the Bankruptcy Code, or are at least supported by, or supportable with, prior precedent.

While there is a statutory requirement to register most forms of security granted by limited companies incorporated in the UK at Companies House, it is worth remembering that there is no statutory requirement for the holder of registered security to inform Companies House if, e.g., the debt secured by a registered charge has been satisfied.

Following our previous alert, in which we highlighted an issue with entries relating to registered security maintained at Companies House being incorrectly updated to indicate that they had in fact been discharged without the aware

In recent months, there have been a few changes regarding MVLs, which we set out below as a helpful reminder to practitioners.

Statements of Solvency

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S89 of the Insolvency Act 1986 sets out the requirements for a statutory declaration of solvency where it is proposed that a company is wound up on a solvent basis.