What remedies should lenders, borrowers and opportunistic credit investors prescribe in light of current market practice and documentation?

This article examines some of the current issues arising in leverage finance agreements on defaults and the expansion of express remedy terms that can impact on debt transfers.

Key Points

Houst Limited's (the Company) restructuring plan (under Part 26A of the Companies Act 2006) (RP) was recently sanctioned at the High Court on 22 July 2022.

KEY TAKEAWAYS

We consider the implications for office-holder claimants of the recent case ofKelmanson v Gallagher & De Weyer [2022] EWHC 395 (Ch).

The case raises interesting points of practice for insolvency practitioners: a director consciously trying to evade or 'game' the statute won't work to prevent office holder recovery, but a sincerely held but mistaken belief on the director's part as to what was being done doing could.

KEY POINTS:

Background

Delaware has seen a significant uptick in the number of assignment for the benefit of creditors (ABC) filings. Through recent decisions, the Court of Chancery has sent a strong message that it expects parties pursuing this bankruptcy alternative to do a better job of justifying the relief they seek. This will require significantly more frequent and robust disclosures to the court and public.

MR DOLLAR BILL LTD V PERSONS UNKNOWN AND OTHERS [2021] EWHC 2718 (Ch)

Federal Decree Law No (16) of 2021 (Factoring Law) was issued on 29 August 2021 and came into effect on 7 December 2021. The Factoring Law, whilst laying a legislative framework for a rapidly expanding trade finance industry in the United Arab Emirates (UAE), also provided much needed clarity from, and an update to, Federal Law No (4) of 2020 (Moveables Law) and Federal Law No (1) 1987 (Civil Code).

New entrants to the trade finance market

Salem Mohammed Ballama Altamimi & ors v Emirates NBD Bank PJSC, HSBC Bank Middle East Limited, ICICI Bank UK Plc and others [2021] DIFC CFI 085 [1]

From 15 February 2022, the UK Insolvency Service is granted new powers to investigate and disqualify or prosecute directors of dissolved UK companies. The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act (the Act) extends the Insolvency Service’s powers, on behalf of the UK Business Secretary, to deal with company directors who abuse the company dissolution process.

Introduction

For some time, the reliance on section 553C of the Corporations Act 2001 (Cth) (Act) as a "set-off" defence to an unfair preference claim, under section 588FA of the Act, has caused much controversy in the insolvency profession. Defendants of preference claims loved it, liquidators disliked it and the courts did not provide clear direction about its applicability – until now.