Individuals undergo bankruptcy proceedings for many reasons, chief among them to seek relief from their debts and obtain a fresh financial start. However, the opportunity for a fresh start can be limited when the bankrupt’s debts arise from securities fraud. In the Supreme Court of Canada’s recent decision in Poonian v.

Teacher Retirement System of Texas plans to reduce its private equity target allocation to 12% from a current exposure of 16.7% starting in October. The planned reduction, which may be implemented over a number of years. For now, the change in target allocation likely means reduced new commitments, while some of the rebalancing could be accomplished by fund AUM growth.

In a significant recent judgment, the ADGM Court has clarified that it has jurisdiction to hear an action for fraudulent trading against the former directors of an onshore UAE company.

By way of background, NMC Healthcare LTD (NMC), and its various subsidiaries, were incorporated in onshore UAE. On 17 September 2020, NMC was redomiciled as an ADGM company. Shortly thereafter, on 27 September 2020, NMC was put into administration pursuant to the ADGM Insolvency Regulations 2015 and joint administrators (the Joint Administrators) appointed.

At the bottom of the stack in investment fund structures, there are generally “real” assets—things like equity interests in portfolio companies, mortgage loans, commercial receivables, maybe even bricks and mortar. Fund finance transactions, though, are by design crafted to be at several levels removed from such underlying assets. With such ultimate assets remote from the transaction, it may seem to fund finance practitioners that concerns about changes in the Uniform Commercial Code (“UCC”) relating to the nature of collateral assets are just as remote.

There's been a flurry of regulatory activity in the UK and Europe over the past few weeks. Here's a look at the highlights.

Corporate governance practices are truly put to the test in two instances: 1) the commencement of litigation; and 2) entry into the zone of insolvency. The latter (distressed circumstances) increases the likelihood of the former (claims against directors and officers).

When distressed circumstances do arise, it is critical to ensure that best practices are in place and adhered to. Often, there may be little time in a crisis to consider and adopt new governance practices given the speed at which events may unfold. Directors need to get it right, and quickly.

Since the pandemic, during which insolvency rates were low due to Government measures, there has been a considerable rise in insolvencies in the UK and many other jurisdictions. High interest rates have significantly increased the cost of borrowing and many companies are saddled with mountains of debt that was taken out in better times and which are now difficult to repay. In addition, high inflation and energy costs, lower consumer confidence and volatile supply chains have all contributed to making the last few years very difficult for businesses.

Fund sponsors continue to face a challenging fundraising market and many are sensitive to increasing investor demand for liquidity. Higher interest rates and public market dislocation continue to make capital-raising difficult, while decreased fund distributions are limiting capital available for new commitments, leading investors to prioritize liquidity and invest cautiously.

The Court of King’s Bench of Alberta (the Court) recently revisited the stringent boundaries on the types of claims that can be brought against court-appointed officers. The decision in North v Davison, 2024 ABKB 242 (the Decision) highlighted the protective measures that courts employ to safeguard the integrity and function of receivership proceedings against unfounded or speculative claims. In the Decision, the Court struck down a counterclaim against Ernst & Young Inc.

One of the most important aspects in arranging any fund finance transaction is structuring the security package. As anyone that has ever looked at a complete structure chart for a fund financing transaction knows, even a “simple” private fund structure typically involves a number of different entity types (limited partnerships, limited liability companies, etc.) organized in several jurisdictions (Delaware, the Cayman Islands, Luxembourg, etc.).