The recent interim decision of the Federal of Australia in Michele Bottiglieri Armatore SPA, Michele Bottigliere Armatore S.P.A [2021] FCA 795 highlights the Australian courts' willingness to recognise cross-border insolvencies in the context of foreshadowed arrests of vessels entering Australian waters.
Bulletins
Welcome to the second edition of our relaunched Commodities bulletin.
It is a privilege to introduce the bulletin from Singapore, with memories of contributing to our previous Commodities bulletin as a junior lawyer in London. Our global team has grown a lot since then, most recently with the addition of Peter Zaman and Dan Perera in Singapore and Matthew Cox in London, two of whom have contributed articles this month.
An interview with Mark Byers, Partner and Head of Strategic Relationships, Grant Thornton
What insolvency trends were you seeing before the pandemic?
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.
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.
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 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.