Over the past week, reports have emerged about filings that have been made at Companies House marking a charge as satisfied, without the company's or relevant lender's knowledge.
There were rumours last week, which were simply that, because Companies House had not publicly announced any issue, but, as we have seen over the weekend and is now widely reported in the news, it appears that there have been at least 800 erroneous filings.
In this note, we provide a high-level overview of key restructuring cases from last year in the US, Asia Pacific and Australia and consider the outlook in 2024 for restructuring transactions.
US
Thames Water is making waves once again with renewed discussion around a potential special administration for the beleaguered water company. We wrote last year about reports that the government and Ofwat were making contingency plans for Thames Water after its failure to raise shareholder funding to bridge a funding gap with nearly £1.4bn of its borrowings due to mature this year.
A common defense to a fraudulent transfer claim in bankruptcy concerning a securities transaction is the “safe harbor” defense under section 546(e) of the Bankruptcy Code. In a unique twist, a post-confirmation trust in Delaware recently argued that the safe harbor defense should not be available if the underlying transaction was illegal under the law where the debtor/transferor was incorporated.
The Court of Appeal has handed down judgment in the case of Humphrey v Bennett, providing some useful guidance on the nature and scope of a director’s duty to avoid conflicts of interest. The case was an appeal against summary judgment of the High Court following a derivative claim brought on behalf of a company by minority shareholders. The case will be of particular interest to directors of smaller companies whose management structures very often operate on a more informal footing.
Changes are afoot to the statutory regime governing special administrations for regulated water companies (the SAR) following the publication of a suite of new legislation.
Impact of the changes on pension trustees
On 7th February 2024, Mr Justice Richards heard closing submissions in the English High Court for a contested sanction hearing for Aggregate Group’s Part 26A restructuring plan. This hearing presented one of the first opportunities to analyse how the Adler decision will affect restructuring plans going forward.
In March 2022, the International Monetary Fund (the “IMF”) assessed Sri Lanka’s public debt to be unsustainable after the country entered the pandemic with thin reserve buffers, high debt levels, and no fiscal space. The IMF’s determination prompted Sri Lanka to begin restructuring its debt the following month. As part of that process, Sri Lanka adopted an “Interim Policy” of suspending debt service on the following affected debts:
On 23 January 2024, the Court of Appeal handed down its much anticipated judgment[1] on the appeal of the Adler restructuring plan pursuant to Part 26A of the Companies Act 2006 (“RP”), which was sanctioned by the High Court on 12 April 2023
As we reported in a previous blog the German legislator in November 2022 introduced the Law on the Temporary Adaption of Restructuring and Insolvency Law Provisions to Mitigate the Consequences of the Crisis (SanInsKG).