The revised Practice Direction: Insolvency Proceedings
July 2018
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You have instructions to commence proceedings for damages for personal injury against a defendant company only to find that the company has entered in to a Company Voluntary Arrangement (“CVA”). What procedural issues arise and what steps should be taken?
What is a CVA?
The long-awaited new Practice Direction – Insolvency Proceedings (PDIP), which came into force on 25 April 2018, has now brought procedure into line with the changes introduced by the significant amendments to the Insolvency Act 1986 (the Act) introduced last year and the Insolvency (England and Wales) Rules 2016 (IR 2016), as amended. This has finally brought to an end the agonisingly long period (over 12 months) in which the provisions of the previous Practice Direction have been at odds with the Act as amended and IR 2016.
In light of the radically and rapidly changing face of bricks and mortar retail, cases providing guidance on the way in which liabilities are to be dealt with in the course of the restructuring / insolvency process are extremely valuable not only for stakeholders and practitioners dealing with the consequences of those processes but also to those guiding and devising the strategies in the first instance.
Wright and Rowley v Prudential Assurance Company Limited is one such case arising out of the collapse of the British Home Stores (‘BHS’) retailing group in 2016.
Possible application of Section 101(22)(A) to safe harbor’s covered entity requirement raises important questions for future transferee defendants.
Key Points:
• Merit Management raises the possibility that customers of “financial institutions” may qualify for protection under Section 546(e) safe harbor even if they would not otherwise meet Section 546(e)’s covered entity requirement.
• Treating customers of “financial institutions” as covered entities could broaden the scope of safe harbor.
UK-based offshore and subsea oil & gas services company solidifies its position and completes ownership transfer to noteholders in major company milestone.
This article was first published for Thomson Reuters' Practical Law Dispute Resolution Blog.
Venezuela’s initiative is unlikely to set the stage for a restructuring of international obligations in the face of US sanctions.
Key Points:
• US sanctions will prohibit US persons from engaging in a restructuring of Venezuela and PdVSA debts that includes the issuance of “new” long term debt.
• Creditors should expect that enforcement action will follow a default. The outcomes of that enforcement action will affect all stakeholders, whether or not they participate.
Restructuring Announcement