In brief
When would the directors of a company be bound to consider the interest of the company's creditors? This was the issue at the heart of the Singapore Court of Appeal's (SGCA) watershed decision in Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] SGCA 10, which comes hot on the heels of the UK Supreme Court's pronouncements on the same issue in BTI 2014 LLC v Sequana SA and others [2022] UKSC 25.
Directors of Australian companies face significant personal monetary – and potential criminal and adverse professional – consequences if they allow the company to trade whilst insolvent.
Australian insolvent trading laws are harsher, and more frequently utilised to prosecute directors personally, than in many other jurisdictions including in the US and the UK.
Accordingly, frequent assessment of a company's solvency by its directors is crucial, particularly in financially difficult times, as are active steps to address any potential insolvency.
In brief
The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company’s creditors.
Contents
In brief
The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company’s creditors.
Contents
In brief
The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company's creditors.
Contents
In brief
The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company's creditors.
Contents
In brief
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act ("Act") received royal assent on 15 December 2021.
The Act extends the scope of powers available to the Insolvency Service to address the issue of directors dissolving companies to avoid paying their liabilities.
Background
This article discusses considerations for credit funds that face a restructuring situation in the post-COVID-19 world — whether one largely caused by the challenges posed by the pandemic or one simply accelerated by such challenges — and how workouts of these investments present their own challenges.
Distressed M&A
Any downturn tends to produce a surge of distressed m&A opportunities, and the current crisis will be no different. Investments in distressed companies follow a different set of rules to "normal" m&A transactions, bringing additional complexity in terms of the stakeholders involved and deal structuring, as well as particular set of challenges for due diligence and buyer protections.