German legislator finally introduces tax exemption for income resulting from debt waivers in restructuring scenarios with retroactive effect.
Section 423 of the Insolvency Act 1986 continues to be a useful tool available to creditors for challenging transactions at an undervalue.
Section 423 gives the English court the power to set aside a transaction (most notably an asset disposal or a dividend) entered into by a debtor if the value of the consideration received by that debtor is significantly less than the value of the consideration the debtor provides to the other party to the transaction. Creditors ought to bear in mind this power when scrutinising a debtor’s previous actions.
The Pension Protection Fund (PPF) has published guidance on company voluntary arrangements (CVAs), setting out the issues that it expects to be considered and addressed. The new guidance will be relevant to companies who are considering a CVA which could affect a DB pension scheme, and to advisers working with those companies or with pension scheme trustees.
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The government has published a consultation paper looking at ways to improve the framework surrounding companies in or approaching insolvency. The policy objective is to reduce the risk of major company failures and their impact on a wider range of stakeholders, including employees and company pension scheme beneficiaries.
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.
In an article that first appeared in the Winter 2017 issue of RECOVERY, Matthew Tait, Partner at BDO, and Matt Hill, Senior Associate at Osborne Clarke, put together a blueprint for practitioners considering turnaround work.
Spanish Congress debates a legislative proposal (Propuesta de Ley) to reinforce the fight against late payment in response to the European Union demand for the correct implementation of the Insolvency Directive (2011/7/EU). This proposal would establish a penalty system against defaulting companies.
UK-based offshore and subsea oil & gas services company solidifies its position and completes ownership transfer to noteholders in major company milestone.
As has been widely reported, Carillion companies are being liquidated. This will affect their suppliers and the extended supply chain, including suppliers of contract workers and CIS subcontractors. There will be a lot of focus on debt and enforceability of things like pay when paid clauses (which, contrary to popular belief, are not always enforceable).