Royal Legislative Decree 1/2020, of 5 May, which approves the Recast Spanish Insolvency Law (Texto Refundido de la Ley Concursal, or TRLC) entered into effect on 1 September. As a result, the former Insolvency Law 22/2003, of 9 July, has been derogated almost in its entirety.

According to the TRLC’s Preamble, Spanish insolvency legislation has been amended given the need to reorder, clarify and harmonise the former Insolvency Law and the provisions that have since amended it.

The Australian Federal Government has announced the temporary amendments to insolvency and corporations laws will be extended until 31 December 2020 in light of the continuing challenges of COVID-19.

In brief

1. Introduction 

The long-running saga between Shandong Chenming Paper Holdings (“Shandong Chenming“) and Arjowiggins HKK2 Ltd (“Arjowiggins“) has continued with the Court of Appeal handing down its judgment on an appeal against a lower court judgment which had dismissed Shandong Chenming’s application to injunct Arjowiggins from presenting a winding-up petition against Shandong Chenming (Shandong Chenming Paper Holdings Limited v. Arjowiggins HKK2 Limited [2020] HKCA 670).

The High Court has expedited a trial at which it would be determined whether luxury car manufacturer McLaren Group could obtain the release of certain security for the benefit of its senior noteholders, failing which a financial restructuring which was contingent on that release could not be implemented: McLaren Holdings Ltd v US Bank Trustees Ltd [2020] EWHC 1892 (Ch). The court concluded that, absent determination of the proceedings within one month, McLaren Group would have no choice but to enter an insolvency process and that this justified expedition in this case.

Singapore’s Insolvency, Restructuring and Dissolution Act (the “IRDA“), together with 48 pieces of subsidiary legislation, comes into force today, 30 July 2020 (available here).

The Corporate Insolvency and Governance Act 2020 introduces sweeping insolvency reforms in response to the business impacts of Covid-19, designed “to give companies breathing space and keep trading while they explore options for rescue”. Our UK Restructuring, Turnaround and Insolvency team have published an article in International Corporate Rescue which considers the key elements of the reforms.

The US Court of Appeals for the Tenth Circuit has ruled that proceeds from property that was fraudulently transferred cannot be recovered under Section 550 of the Bankruptcy Code.[1] This decision limits a subsequent recipient’s exposure where the initial transferee of the property had altered the form of the property that was initially received prior to transferring it to that subsequent recipient.

The Main Street Lending Program is designed to help companies that were in sound financial condition prior to the COVID-19 pandemic to maintain their operations and payroll until conditions normalize. This White Paper gives a broad understanding of the program’s terms and implications by delving into the key questions that market participants are likely to have about the program and addressing the latest changes implemented in the final legal forms and agreements. 

In what is likely to be one of this year’s landmark insolvency decisions, the Supreme Court in Bresco v Lonsdale has considered the interaction between insolvency set-off and adjudication, though the judgment is likely to have application to other dispute resolution processes including litigation and arbitration. The Supreme Court, unlike the High Court and Court of Appeal, permitted the adjudication to continue and, in doing so, dismissed the suggestion that insolvency set-off always results in the extinction of cross-claims to be replaced by a single claim for the balance.