In the current times of financial stress, a borrower seeking to renegotiate or refinance existing financing arrangements may be asked by its lender to enhance or refresh its security package through the grant of a new floating charge.
The question of whether a floating charge can be avoided due to section 245 of the Insolvency Act 1986 ("IA 1986") can arise in such a context.
Void floating charges under section 245 of the IA 1986
2022 was an unprecedented year in insolvency practice. For as long as anyone can remember, there have always been several large corporate insolvency filings with national scope in each calendar year that hits the front page of the papers. But in 2022, there wasn’t even one.
Canadian tech companies have entered uncharted waters, with a range of factors threatening to produce a liquidity crunch for many of them.
For years, the tech sector enjoyed record volumes of venture capital investment fueled by low interest rates, an inflow of foreign and corporate investment, and the collective desire to create a vibrant tech ecosystem in Canada. As the economic tides have changed, with climbing interest rates and a looming recession, tech companies are facing an increasingly tough fundraising environment.
When an Event of Default is "continuing" is not defined or addressed in the ISDA Master Agreement. Until now it does not appear to have been expressly considered in case law either.
As the tile suggests the state of recognition and assistance jurisprudence & practice in Hong Kong is less than clear. This follows the recent (mostly) conflicting 1st instance decisions of Up Energy and Global Brands. Here are my views about (i) what I believe is settled; (ii) the points of judicial difference; and (iii) what remains unclear.
Settled
The Supreme Court has handed down its long-awaited judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 25.
Basic facts
In the latest edition of Going concerns, Stephenson Harwood's restructuring and insolvency team covers the use of lock-up agreements in schemes of arrangements, and the developments in Singapore and Hong Kong as regards recognition of foreign insolvencies. Our final article is a must-read for lenders, discussing the circumstances under which security may be unwound as a undervalued transaction.
Content
Hong Kong’s insolvency regime is based mainly on that of the United Kingdom. The legislation concerning corporate insolvency is contained largely in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (“CWUMPO”) and the Companies (Winding-up) Rules. The corporate insolvency and winding up provisions in the legislation are broadly based on the Companies Act 1929 and the Companies Act 1948 of the UK. The last major amendment of those provisions was made in 2016.
A guide to restructuring and insolvency issues and procedures in Hong Kong
Contents
Seahawk China Dynamic Fund [2022] HKCFI 1994 (date of reasons for decision: 4 July 2022)
Introduction
In the matter of an application for recognition and assistance by the provisional liquidator of Global Brands Group Holding Limited (in liquidation) [2022] HKCFI 1789 (date of decision: 23 June 2022)
The Hong Kong Court has recently granted recognition and assistance to the Bermuda provisional liquidator of Global Brands Group Holding Limited (in liquidation) (Global Brands / Company). Stephenson Harwood acted for the provisional liquidator.