As the measures in the UK designed to protect businesses from insolvency draw to an end, what guidance can be taken from Australia where similar measures ended a few months ago?
Given the global pandemic, it's somewhat unsurprising that the UK's loss of access to the EU Regulation on Insolvency Proceedings (EUIR) has received relatively little press.
After all, what with the state support of furlough and loan schemes along with the temporary suspension of winding up petitions and wrongful trading rules, as well as the ban on landlords evicting commercial tenants formal insolvencies in the UK have "just dried up" says HFW fraud and insolvency co-head Rick Brown.
The recent restructuring of the Norwegian Group by the Irish High Court helpfully clarifies the application of the Cape Town Convention in Irish restructuring. It is also an interesting case study regarding the circumstances in which the Irish courts will restructure a group of companies, which is not headquartered in Ireland.
What were the main insolvency and restructuring trends you were seeing pre-pandemic?
A challenging economic environment and Covid-19 are behind a looming wave of contentious insolvency in the Middle East. The legislative framework in the UAE now provides the tools to creditors to face the challenge.
Few things go together as naturally as fraud and insolvency. The pattern is now well rehearsed: scams pile up unnoticed while money flows in the good times, but when recession hits, increased scrutiny from lenders, counterparties and the tax man – not to mention insolvency practitioners – means fraud is far more likely to be discovered.
Mr. O’Neill held a Buy-Out-Bond (BOB) with a pension provider. The retirement options were standard for such a product; allowing for the purchase of annuity, or investment in an Approved Retirement Fund (ARF) or Approved (Minimum) Retirement Fund (AMRF) as well as providing for taxable and non-taxable lump sum entitlements. Mr. O’Neill denied any entitlement of his official assignee (OA) in bankruptcy in exercising the retirement options provided by his pension where a Bankruptcy Payment Order (BPO) pursuant to s85 of the Bankruptcy Act 1988 (Act) had not been obtained.
The Covid-19 pandemic has had a severe impact on the economy. This has given rise to an increasing number of claimants with claims against insolvent businesses.
In these circumstances, a third-party claimant would usually notify the company’s insolvency practitioner of its claim. The claimant is then required to pursue its recovery as part of the insolvency process alongside other creditors.
The Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act)1
The Department of Enterprise, Trade and Employment commenced a public consultation process on 8 February 2021, in relation to proposed legislation which will allow for a new restructuring procedure for the rescue of small companies.
The UK’s new “restructuring plan” was enacted in June 2020.1 This highly-anticipated regime introduced (for the first time into English law) a tongue twisting “cross-class cram down” (CCCD) mechanism by which a restructuring plan can (at the court’s discretion) be imposed on an entire class of dissenting creditors or members.
Until recently, only two companies had successfully used the restructuring plan regime.2 In both instances, CCCD was not considered as the required voting thresholds (i.e. 75%) were met.