Whilst the power of a chairperson to exercise a casting vote at creditors’ meetings is a useful mechanism to resolve a deadlock in voting, it does not confer unconstrained discretion. The recent Glenfyne Appeal[1] provides valuable guidance as to the appropriate exercise of a casting vote and also serves as a reminder of the Court’s significant powers to review and reverse failed creditors’ resolutions due to the exercise of a casting vote.

The Corporate Insolvency and Governance Act 2020 came into effect in the United Kingdom on 26 June 2020. It makes major changes to UK insolvency law. The full extent of those changes will only become apparent in the following months, as the courts and insolvency practitioners grapple with its 254 pages. Three strange aspects of the Act will fundamentally affect how financings to UK companies are structured and documented.

Elearning company Skillsoft provided two expedited alternatives to bankruptcy in its first-day filings in the Bankruptcy Court for the District of Delaware.

The UK Corporate Insolvency and Governance Bill, currently progressing through UK Parliament, will have an impact on various stakeholders in the aviation industry once enacted, due to its moratorium, supply contract, and restructuring plan provisions.

Key Features

The UK Corporate Insolvency and Governance Bill has three key features:

While the full extent of COVID-19's effect on the economy remains to be seen, the pandemic will likely create significant restructuring activity for companies already experiencing financial distress and otherwise healthy companies distressed by the pandemic. We have already seen an increase in Chapter 11 filings, and more will follow. 

In ACN 093 117 232 Pty Ltd (In Liq) v Intelara Engineering Consultants Pty Ltd (In Liq) [2019] FCA 1489, the court considered whether a “legal phoenix” arrangement entered into after receiving professional advice was in fact a voidable transaction.

The facts

Intelara Pty Ltd (OldCo) operated an engineering consultancy business and after experiencing financial difficulties in 2014 sought professional advice concerning the potential restructure of the company.

In KSK Holdings (Australia) Pty Ltd (in liquidation) [2019] NSWSC 1463 a liquidator sought directions from the Supreme Court of New South Wales under section 90-15(1) of the Insolvency Practice Schedule (Corporations) at Schedule 2 of the Corporations Act 2001 (Cth).

While the full extent of COVID-19’s impact on the economy remains to be seen, it will likely create significant restructuring activity for companies already experiencing financial distress and otherwise healthy companies distressed by the pandemic. We have already seen an increase in chapter 11 filings, and more will follow.

As the economic effects of the coronavirus (COVID-19) pandemic continue to be felt, Germany’s protective shield proceeding under Section 270b of the Insolvency Code is a way for companies to restructure under the direction of management.

The UK government on 20 May set out its hotly anticipated Corporate Insolvency and Governance Bill, which, once enacted, will bring into force previously announced insolvency reforms.

We summarise below the main provisions of the bill as it currently stands. Please look out for further LawFlashes on this legislation as it develops over the next few weeks.

Moratorium