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.
Chapter 11 plans are a form of stakeholder democracy. Elaborate rules govern voting and its consequences, and, in Section 1125(b), how acceptances—and rejections—may be solicited. Well, sort of.
The High Court, in its recent judgment In the matter of ipagoo LLP (in administration) [2021] EWHC 2163 (Ch) (Ipagoo), has determined that no statutory trust exists over safeguarded funds held under the Electronic Money Regulations 2011 (EMRs). This can be contrasted with the decision In Re Supercapital [2020] EWHC 1685 (Ch) (Supercapital) which found that the Payment Services Regulations 2017 (PSRs) create a statutory trust over safeguarded funds.
In brief
"All happy families are alike, each unhappy family is unhappy in its own way. With apologies to Tolstoy, the Akhmedov family is one of the unhappiest ever to have appeared in my courtroom." – Mrs. Justice Knowles
Background
In brief
Australia's borders may be closed, but from the start of the pandemic, Australian courts have continued to grapple with insolvency issues from beyond our shores. Recent cases have expanded the recognition of international insolvency processes in Australia, whilst also highlighting that Australia's own insolvency regimes have application internationally.
Key takeaways
Chapter 11 plans of reorganization provide creditors with recoveries (cash or new securities) in exchange for a release and discharge of all claims against the debtor. Many Chapter 11 plans go a step further to release claims against related entities and persons who are not debtors in the case. Members of Congress have recently proposed legislation that could prohibit such nonconsensual third-party releases.
The Arrium Series
Welcome to issue #2 of our Arrium Series, where senior members of the Baker McKenzie team involved in the successful defence of proceedings against the former CFO, former Treasurer and other former employees of the Arrium Group, consider key issues arising in those and related insolvent trading proceedings and from the judgment handed down on 17 August 2021.
In brief
With the courts about to consider a significant and long standing controversy in the law of unfair preferences, suppliers to financially distressed companies, and liquidators, should be aware that there have been recent significant shifts in the law about getting paid in hard times.