Nearly two years after it was first passed in Parliament on 1 October 2018, the Insolvency, Restructuring and Dissolution Act (“IRDA”) has now come into operation on 30 July 2020. The IRDA not only unifies Singapore’s legislation in relation to personal and corporate insolvency and debt restructuring, but also introduces significant changes to the present regime.
In this update, we will highlight nine key changes of the new provisions of the IRDA.
1. Restriction of Ipso Facto Clauses in Insolvency/Restructuring Proceedings
Introduction
In the current COVID-19 environment it is likely that there will be more businesses becoming insolvent. Some of those businesses will have an interest in Jersey property. For example as owners of Jersey property or holders of a lease of retail premises situated in the Island. The business may also have locally employed employees to consider.
What is an SPC?
Treatment in insolvency situations
ABC Company (SPC) v J & Co Ltd
Axiom
Additional case law
SPCs and litigation funding
Test for insolvency
Until the Cayman Islands introduces any changes to its corporate insolvency regime, with the COVID pandemic pushing many groups into the zone of insolvency, the following considerations remain relevant to structures involving a Cayman Islands entity:
This briefing first appeared in the June 2020 edition of South Square Digest.
Executive Summary
In February 2020 the British Virgin Islands Commercial Court (the "BVI Court") sanctioned a creditor scheme of arrangement, which was part of a much larger cross boarder restructuring. This scheme of arrangement, which as a creditor scheme was itself rare for the BVI, was preceded by the BVI's first ever "soft touch" provisional liquidation (in linked proceedings), which commenced in December 2018.
InIn re Juarez, 603 B.R. 610 (9th Cir. BAP 2019), the Bankruptcy Appellate Panel of the U.S. Court of Appeals for the Ninth Circuit addressed a question of first impression in the circuit with respect to property that is exempt from creditor reach: it adopted the view that, under the "new value exception" to the "absolute priority rule," an individual Chapter 11 debtor intending to retain such property need not make a "new value" contribution covering the value of the exemption.
Background
Introduction
Solvency test
Standing and process
Purposes of administration
Effects of administration order
Administrator's duties and functions
Remuneration and swearing in of administrator
In an application by Joint Official Liquidators for sanction of an agreement to sell the assets of a Company over the objections of creditors, the Court has confirmed the importance of establishing a clear and transparent sale process, which enjoys the confidence of the interested parties, in order to establish that the sale agreement is in the best interests of creditors.
Background