An article for Insolvency Practitioners and other insolvency specialists outlining the challenges and pitfalls of obtaining recognition of a Trustee in Bankruptcy to enable enforcement over assets in France in a post-Brexit and post-Covid cross-border insolvency landscape.
Introduction
WE CONSIDER BELOW THE SHARE CHARGE ENFORCEMENT OPTIONS FOR PRIVATE CREDIT LENDERS, WHO MAY NOW COME TO PREFER 'APPROPRIATION' AS THE LESS FORMAL, MORE IMMEDIATE 'LOAN-TO-OWN' TOOL TO SOLVE FOR BORROWER JV DISPUTES, BREAK SHAREHOLDER DEADLOCKS, AND AS A PROACTIVE MEANS TO PRESERVE VALUE IN A CREDIT.
GIVEN THE RECENT NEWS REGARDING SILICON VALLEY BANK, RICHARD OMAN LOOKS AT THE IMPACT THAT LENDER INSOLVENCY HAS ON LOAN FACILITIES AND WHAT BORROWERS AND LENDERS NEED TO CONSIDER.
BACKGROUND
Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2
The High Court has unanimously dismissed an appeal against the Full Court decision in Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) [2021] FCAFC 64, finding that the “peak indebtedness rule” does not form part of s 588FA(3) of the Corporations Act and providing guidance as to how to approach the analysis required under that section.
Background
Metal Manufactures Pty Ltd v Morton (as liquidator of MJ Woodman Electrical Contractors Pty Ltd (In Liq)) [2023] HCA 1
TAKE AWAY POINTS
KARL CLOWRY, SEÁN MCGUINNESS, AND AZIZ ABDUL LOOK TO THE LESSONS FOR SHAREHOLDERS, CREDITORS AND ADMINISTRATORS FROM THE FIRST CREDITOR LED RESTRUCTURING PLAN.
The Good Box Co Labs Limited (in Administration) case demonstrates once more the viability of the process for the mid-market and continues a trend of RPs being used by a determined creditor / shareholder constituency to rescue an equity investment within an existing corporate group. In short, the mid-market RP is still a highly situational, albeit flexible, tool."
MAG Financial and Investment Ventures Pty Ltd v El-Saafin [2022] VSCA 286
The Victorian Court of Appeal has recently held that credit provided under the National Credit Code (“the NCC”) to purchase, renovate or improve residential property for investment purposes is restricted to the immediate use of the debtor.
DO YOUR DIRECTORS HAVE SUFFICIENT TOOLS AVAILABLE TO ALERT THEM TO CIRCUMSTANCES THAT COULD INDICATE FINANCIAL DIFFICULTIES IN A COMPANY AND ASSIST THEM IN ANY FUTURE RESTRUCTURING DECISIONS?
Good Financial tools will enhance Directors' understanding the company's financial position and alert them to any early signs of potential financial difficulties.
FINANCIAL DIFFICULTIES
TODAY, THE EAGERLY-AWAITED JUDGMENT HAS BEEN HANDED DOWN BY MR JUSTICE ZACAROLI IN RESPECT OF THE APPLICATION FOR DIRECTIONS MADE BY OFFICE-HOLDERS OF A NUMBER OF FAILED ENERGY SUPPLIERS.
The impact of this judgment will be felt much wider than just within the applicants' insolvent estates and it is relevant to any office-holder or unsecured creditor of a failed energy supplier.
T W Timber Treatment Pty Ltd v Giddings [2022] VSCA 147
The Victorian Court of Appeal has re-affirmed that a director’s signature can indicate an intention to personally guarantee a company’s obligations, even where that signature is qualified and accompanied by contrary indications in the signed document.
The Court also confirmed that a creditor’s rights under a director’s guarantee, including a right to interest, are not affected by a Deed of Company Arrangement (DOCA).
Background