This week, the Ninth Circuit takes a close look at a sizable antitrust jury award, and explains what constitutes a tax “return” for purposes of bankruptcy law.
OPTRONIC TECHNOLOGIES, INC v. NINGBO SUNNY ELECTRONIC CO. LTD.
The Court held that sufficient evidence supported a jury verdict holding telescope manufacturers liable for antitrust violations.
This update summarises the latest jurisprudence on insolvent schemes of arrangement (schemes) and restructuring plans (RPs), and provides an overview of the key themes that are emerging in this area.
Key Concepts and Notes
This week, the Ninth Circuit explains the ins-and-outs of property abandonment under the Bankruptcy Code, and explores the government’s privilege to withhold the identity of informants in discovery.
The Federal Court has recently confirmed that liquidators are able to assign their rights to examine people and to obtain the production of documents.
Liquidators may now find that there is greater interest from litigation funders to purchase potential claims that have not been fully investigated.
Overview
Many investors, including PE firms, are waiting with bated breath to see how the UK economy, currently dependent on COVID-19-related government support, will respond once that stimulus is withdrawn. An increase in UK company insolvencies is expected, creating opportunities for savvy investors to acquire businesses at bargain prices, while at the same time appearing to be white knights swooping in to save a beloved high street brand or large regional employer.
On 8 July 2021, the Payment and Electronic Money Institution Insolvency Regulations 2021 (the Regulations) will come into force in the UK and introduce a new special administration regime for insolvent payment institutions (PIs) and electronic money institutions (EMIs). The key purposes of the Regulations are to ensure that, if a PI or EMI becomes insolvent (and/or it is fair or expedient to put the institution into special administration), funds are quickly returned to customers and any shortfalls in the amounts available are minimised.
A Supreme Court in Australia has dismissed an application by a UK company’s moratorium restructuring practitioners for recognition of a UK moratorium and ordered that the company be wound up under Australian law.
The decision provides insights into the interaction between cross-border insolvencies and the winding up in Australia of foreign companies under Australian law.
Introduction
In the matter of Hydrodec Group Plc [2021] NSWSC 755, delivered 24 June 2021, the New South Wales Supreme Court:
In dismissing Darty Holdings SAS’ (“Darty”) appeal in a recent decision[1], Miles J. has confirmed that an English court will look at the actual relationship between the parties involved, rather than the wider context, when considering whether those parties are connected. This will be the case even where the wider context consists of a transaction that will, immediately following the relevant transaction, sever that relationship.
Overview
On 12 May 2021, the High Court sanctioned three inter-conditional restructuring plans, under the Part 26A of the Companies Act 2006, for certain English subsidiaries of the Virgin Active group, despite major opposition of certain landlords.[1] In the landmark decision, the High Court exercised its discretion to cram-down multiple classes of dissenting landlords in each plan, compromising their claims.
It is possible for a trustee in bankruptcy to make a claim to property held by a bankrupt on trust. For example, by lodging a caveat over a home that is held on trust.
A trustee in bankruptcy may be able to make a claim, relying on the bankrupt’s right of indemnity as trustee of the trust. This is because the bankrupt’s right of indemnity, as trustee, is itself property that vests in the trustee in bankruptcy under the Bankruptcy Act 1966.
Explaining a trustee’s right of indemnity