Executive Summary
Companies in the health care industry face many unique challenges when undergoing a bankruptcy, including challenges arising due to the federal and state law framework governing the use and disclosure of medical information. In February 2018, the U.S. Department of Health and Human Services announced that it had reached a settlement with the receiver appointed to liquidate the assets of Filefax Inc., a medical record storage and transportation company, resolving claims against Filefax for potential violations of the Health Insurance Portability and Accountability Act, or HIPAA.
'I can't be responsible for every single thing that goes on at Sports Direct. I can't be. I can't be!'
Mike Ashley founder and Executive Deputy Chairman Sports Direct appearing before the Business Innovation and Skills Select Committee (June 2016)
Companies in the healthcare industry face many unique challenges when undergoing a bankruptcy, including challenges arising due to the federal and state law framework governing the use and disclosure of medical information. In February 2018, the U.S. Department of Health and Human Services (HHS) announced that it had reached a settlement with the receiver appointed to liquidate the assets of Filefax, Inc., a medical record storage and transportation company, resolving claims against Filefax for potential violations of the Health Insurance Portability and Accountability Act (HIPAA).
Obtaining Decree
After obtaining a Decree (or judgment in England) there are a number of steps that can be taken, if the debtor does not make payment, to recover the outstanding debt. In Scotland this process is known as “diligence”.
Charge for payment (“Charge”)
Lord Bannatyne has issued his opinion in respect the Note of The Provisional/Interim Liquidator of Equal Exchange Trading Limited [2018] CSOH 35 which gives guidance in respect of the role of the court reporter when fixing the remuneration of a liquidator. The full opinion can be viewed here.
Background
In LRH Services Ltd (in Liquidation) v Raymond Arthur Trew (1) Jason Marcus Brewer (2) and Derek O'Neill (3) [2018] EWHC 600 (Ch), LRH Services Ltd (LRH), acting by its liquidators, brought claims for breach of duty against three former directors. The claims arose from a reorganisation in 2009. LRH did not trade but had two trading subsidiaries (R and E) and it was wholly owned by CSGH, which also had another subsidiary in addition to LRH, CSG. Two of the directors of LRH were substantial shareholders in CSGH.
The reorganisation
Toone v Robbins 2018 [EWHC] 569 (Ch)
The lessons to takeaway
Directors who are also shareholders need to be careful when arranging how to take payments from a company. For tax reasons, dividends can be perceived to be an attractive way to take cash out of a company, but if there are insufficient distributable reserves, such payments are unlawful and can be clawed back.
The Changwon District Court in South Korea has this afternoon (23 March 2018) issued a comprehensive prohibition order (CPO) following the application of Sungdong Shipbuilding and Marine Engineering Co. Ltd (Sungdong) to enter Chapter 11 Rehabilitation filed earlier this month.
The effect of the CPO is to provisionally prohibit all creditors of the yard from taking legal action in South Korea to secure and enforce their claims by attachment, arrest or foreclosing of their security interests.