Two recent cases provide a timely reminder of the opportunities offered by creditor-funded litigation as a mechanism for bringing funds into what would otherwise be unfunded administrations. Both cases are examples of flexible and “light touch” exercises of judicial discretion which duly recognise the constraints and complex commercial considerations invariably encountered by liquidators in unfunded liquidations.

Approval of litigation funding agreements

Can liquidators disclose legal advice to creditors without waiving privilege? Common interest privilege may assist.

Common interest privilege

Legal professional privilege protects communications between a lawyer and client created for the dominant purpose of seeking or providing legal advice or for current or anticipated litigation.

If advice is disclosed to third parties, there may be a waiver of that privilege.

Insolvency practitioners can benefit from registration errors on the Personal Property Securities Register (PPSR).

Stay alert to any mistakes made by secured parties, as unregistered or invalidly registered interests could vest in the company.

Common errors include:

In The Joint Provisional Liquidators of BJB Career Education Company Limited (In Provisional Liquidation) v Xu Zhendong¹, the Court of First Instance considered the Hong Kong courts' common law powers to recognise and assist foreign courts and insolvency practitioners overseeing non-Hong Kong insolvency proceedings.

The questions considered by the court were:

There continues to be doubt about the validity of certain Committees of Inspection (COI) established during a liquidation and the approvals given by them. Another decision of Pritchard J in the Supreme Court of Western Australia reinforces the potential risk to liquidators relying on COI approvals in the scenario where no separate meetings of creditors and contributories (i.e. shareholders) are held to approve the establishment of a COI.

The insolvency of Hanjin Shipping (Hanjin), the world's seventh largest container line, is likely to have a significant impact throughout the maritime sector. In this briefing we provide an overview of some of the potential consequences of Hanjin's insolvency and which parties will be most affected by this development.

Background

At first glance, it seems that cross-border insolvencies between the UK and EU are likely to become more time-consuming, complex and expensive post-Brexit. However, the situation may not be as dire as it first appears due to the existence of alternative legislation and the exemptions to the EU legislation. As with other areas of law, when it comes to insolvencies much will depend on what steps are taken to maintain the current arrangements with the EU or whether they fall away altogether.

A recent decision of the High Court has ended an insurer’s fight to avoid being joined to insolvent trading proceedings. This decision confirms the ability of liquidators to directly pursue proceeds of insurance policies held by insolvent insured defendant directors and has important ramifications for insolvency practitioners as well as insurers and litigation funders.

Summary

Le 1^er septembre 2016 la compagnie Hanjin Shipping Co Ltd (“Hanjin”) première compagnie coréenne de transport maritime par conteneur a sollicité la protection de la loi coréenne sur les faillites et une procédure collective, dite de “réhabilitation”, a été ouverte par les tribunaux de Séoul.

In the recent judgment of Gorbunova v The Estate of Boris Berezovsky (deceased) and others¹ the High Court has provided useful guidance as to when summary judgment is appropriate in deciding whether a trust was established.