On July 31, 2024, the Supreme Court of Canada released its decision in Poonian v. British Columbia (Securities Commission), on whether financial sanctions imposed by securities regulators are dischargeable through bankruptcy. The decision resolves a conflict between Alberta and B.C. jurisprudence and will have a significant impact on the treatment of all administrative orders in bankruptcy proceedings.
The facts
The long-awaited amendment "H" of the Slovenian Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (the "Act") entered into force on 1 November 2023. The new provisions complete the transposition of Directive 2019/1023,[1] introducing three crucial sets of changes to the Slovenian insolvency and restructuring legislation.
In our practice, we have found that the most common reason for distressed companies to initiate reorganisation measures is a severe liquidity squeeze.
Driven by regulation, banks are increasingly reluctant to grant senior bridge financings, leading companies to resort to trade credits of major suppliers, such as deferrals or generous payment agreements. But these trade creditors are often unaware of significant third-party liability risks.
Shareholders of Austrian limited liability companies ("GmbH") often stipulate the right to purchase the shares of co-shareholders in certain events. These "share purchase rights" (Aufgriffsrechte) entitle the remaining shareholders to acquire the share of a shareholder when a contractually defined event (Aufgriffsfälle), like insolvency or the death of a shareholder, occurs. Often these rights are laid down in articles of association or a separate shareholders' agreement (Syndikatsvertrag). They are generally qualified as option rights.
After a delay of more than a year, an Act on Preventive Restructuring (the "Act") implementing the EU directive on preventive restructuring frameworks finally became effective in the Czech Republic on 23 September 2023. The long-awaited Act introduced a brand-new legal tool enabling viable enterprises in temporary financial distress to achieve restructuring outside insolvency proceedings. It is a voluntary and flexible process requiring cooperation with creditors, but not necessarily with all of them.
Who can use it?
Regulations on Foreign Direct Investment (FDI) are becoming increasingly influential, especially in M&A transactions. It is essential to consider how these regulations will affect foreign creditors, particularly those from non-EU countries. The Slovak FDI Act will have numerous implications for financing and security arrangements.
Security package
Section 192 of the Canada Business Corporations Act (CBCA) provides a flexible tool that allows corporations to achieve important change and undertake various corporate transactions, subject to court approval and oversight. This article aims to provide an update on the Québec courts’ acceptance of virtual securityholder meetings and approach to the solvency requirement.
Overview of the arrangement process
After a delay of more than a year, an act on preventive restructuring (the "Act") implementing the EU directive on preventive restructuring frameworks finally became effective in the Czech Republic on 23 September 2023. The long-awaited Act introduces a brand-new legal tool preventing the insolvency of viable enterprises in temporary financial distress.
What is preventive restructuring and why use it?
Employee terminations and downsizing are features of most restructurings. While employees can typically assert a claim in the insolvency process, parallel claims and complaints with labour relations regulators and tribunals are relatively common. In a recent judgment, the Superior Court of Québec clarified that all employee claims can be extinguished through a plan of arrangement under the Companies’ Creditors Arrangement Act (CCAA), including those filed before regulators and tribunals.
"Bulgaria transposed the Restructuring Directive's prohibition to terminate contracts via ipso facto clauses, but also (deviating from the Directive) prohibited contractual set-off in restructuring, thus rendering the preservation of many contracts performed via contractual set-off / netting of payment meaningless. So, in drafting ipso facto clauses the impossibility to perform contracts in restructuring, due to the contractual set-off prohibition, may be utilised as an additional trigger for termination, now".