News outlets and industry publications have been publishing information about recent “crypto winter” bankruptcies. In order to understand the impact of these bankruptcies as well as how they may impact your investments, it is important to understand what is currently known about these recent filings.
Three Arrows Capital Liquidation and Bankruptcy
The Fifth Circuit recently weighed in on the hotly contested issue of whether the Federal Energy and Regulatory Commission (FERC) or the bankruptcy court has controlling jurisdiction when it comes to the question of a bankruptcy debtor’s ability to reject contracts regulated by FERC. FERC-regulated contracts include electricity power purchase contracts, as well as transportation services agreements involving oil and gas.
The High Court has held that disclosure of debts and undertakings given to the Circuit Court in seeking a protective certificate for a personal insolvency arrangement can be relied on in other proceedings.
Background
The McLaughlins were engaged in a long running saga of litigation with Bank of Scotland plc (“BOS”) and, after a loan sale, Ennis Property Finance Limited (“Ennis”).
In 2016 they issued High Court proceedings against Ennis and Tom Kavanagh (the “Plenary Proceedings”).
In the bankruptcy world, not all claims are created equal. Rather, certain special categories of claims have priority status and are not only paid ahead of other claims, but are also often paid in full. One such category of claims is found in Bankruptcy Code § 503(b)(9), which grants priority claim status for goods which were sold in the ordinary course of business and received by a debtor within the 20-day window leading up to the bankruptcy filing. The code section is very clear, however.
The Small Company Administrative Rescue Process (SCARP) was commenced on Tuesday 7 December. Now that the process is available we set out some practical considerations for companies and creditors.
SCARP
Some of the UK Government’s COVID-19 supports for businesses came to an end, or started to taper off, on 30 September 2021. The UK Insolvency service published statistics yesterday showing that the number of corporate insolvencies has returned to pre-pandemic levels. There is no reason to believe that the Irish position will be substantially different when supports come to an end.
What happened when COVID-19 struck?
The recent restructuring of the Norwegian Group by the Irish High Court helpfully clarifies the application of the Cape Town Convention in Irish restructuring. It is also an interesting case study regarding the circumstances in which the Irish courts will restructure a group of companies, which is not headquartered in Ireland.
Mr. O’Neill held a Buy-Out-Bond (BOB) with a pension provider. The retirement options were standard for such a product; allowing for the purchase of annuity, or investment in an Approved Retirement Fund (ARF) or Approved (Minimum) Retirement Fund (AMRF) as well as providing for taxable and non-taxable lump sum entitlements. Mr. O’Neill denied any entitlement of his official assignee (OA) in bankruptcy in exercising the retirement options provided by his pension where a Bankruptcy Payment Order (BPO) pursuant to s85 of the Bankruptcy Act 1988 (Act) had not been obtained.
The Department of Enterprise, Trade and Employment commenced a public consultation process on 8 February 2021, in relation to proposed legislation which will allow for a new restructuring procedure for the rescue of small companies.
It is a basic principle of the law of corporate insolvency that the assets of a company are effectively frozen for the benefit of all of the company’s creditors when a liquidator is appointed. The principle is provided for under Section 602 of the Companies Act 2014. It provides that any disposition of company property, which includes the sale of shares in the company and the charging of company property, that is done without the sanction of the liquidator or a director who has retained the power to do so, will be void unless the court otherwise orders.