INTRODUCTION:

The Insolvency and Bankruptcy Code, 2016 (‘Code’) was enacted by the Parliament with the aim to provide and revamp the framework for insolvency resolution in India in a time bound manner and for the promotion of entrepreneurship, credit availability and balancing of different interests of each and every stakeholder of a Company.

In the first litigation involving the Furlough scheme, the court in Re Carluccio's (in administration) ruled on how the administrators can lawfully give effect to furlough arrangements with the employees who have agreed to the variation of their employment contract.

Read on for our analysis of the case which gives an interesting insight into how the courts in the future might interpret the furlough scheme.

1. Background

Carluccio’s in administration

GENERAL INSOLVENCY LANDSCAPE IN GERMANY PRE-COVID-19

Without undue delay upon occurrence of illiquidity or overindebtedness, at the latest within three weeks, members of the representing body of a legal entity have to apply for the opening of insolvency proceedings over the assets of such entity

INSOLVENCY REASONS:

CORONAVIRUS RESPONSE – INTRODUCING FLEXIBILITY TO DIRECTORS' DUTIES?

IN LIGHT OF COVID-19, THE UK GOVERNMENT RECENTLY ANNOUNCED ITS INTENTION TO TEMPORARILY SUSPEND THE OFFENCE OF WRONGFUL TRADING BY DIRECTORS OF UK COMPANIES. THIS WILL INEVITABLY HAVE A WIDE-RANGING EFFECT ON BOTH DIRECTORS AND CREDITORS.

Last week, the Government announced a number of measures to provide financial support to businesses struggling with the impact of COVID-19, including two new Government-backed funding schemes.

Addleshaw Goddard is monitoring those measures closely, with our latest updates found here.

Notwithstanding, it is inevitable that we will see more companies collapse over the coming months, as they struggle to cope with the indefinite business disruption.

Systems Building Services Group Ltd, Re [2020] EWHC 54 (Ch)

Liquidation is not a panacea for the relevance and application of directors' duties. A practical example of which involves a director of a company in insolvency procuring and agreeing to an off-market sale of a property to himself by a rogue IP at a price which he knew to be a significant undervalue.

The recently published Pension Schemes Bill provides for major extensions of the Pensions Regulator's powers, including the creation of new criminal offences which are very broad in scope and could potentially catch a wide range of people. Whilst the Bill is not set to become law this side of the general election, it seems likely that a future government will seek to enact the measures contained in the Bill, many of which are likely to command cross-party support. 

Following are the various modes for existing business in India –

• Transfer of shares for exiting business in India
• Voluntary Liquidation in Existing Business in India
• Winding up by the National Company Law Tribunal when Exiting Business in India
• Other Options for Exiting Business in India

This article discusses all of the above mentioned points in greater detail-

Transfer of shares for exiting business in India

1. Legal provisions governing transfer of shares

• The Court of Appeal has given guidance to insolvent companies about whether to commence an adjudication.
• There is an important distinction to be drawn between a company in a CVA and one in liquidation.
• Parties need to be careful when making general reservations to an adjudicator's jurisdiction.

What's it about?

Garcia v Marex Financial Ltd [2018] EWCA Civ 1468

The Court of Appeal has for the first time applied the rule against reflective loss to claims by creditors. The rule had in the past only been used to prevent claims by shareholders against directors, where the losses claimed by the shareholders reflected those suffered by the company.