On 15 November 2023, the Temporary Act on Transparency of Expedited Liquidation (Turbo Liquidation Act) will enter into force. It aims to increase trust in the expedited liquidation procedure by improving its transparency, the legal protection of creditors and combatting the abuse of the procedure.
Background
The Federal Court of Justice has lowered the threshold for the approval of an insolvency plan by the insolvency court.
Background
The English Court has, for only the second time, made a compensation order under the Company Directors' Disqualification Act 1986 against a disqualified director.
Background
The UK Jurisdiction Taskforce has launched a new public consultation on the treatment of digital assets in English insolvency law.
Crypto assets are 'property'
In November 2019, the UKJT published its seminal legal statement on the status of crypto assets and smart contracts. Since then, there has been widespread acceptance that crypto assets are 'property' for the purposes of English law. And the Law Commission has recently proposed a new, third category of personal property rights to capture digital assets.
Impact on insolvency law
In contrast to a case under Chapter 11 of the Bankruptcy Code, which centralizes a company’s debt adjustment efforts in the U.S. and provides for expansive oversight and supervision by a U.S. court, a Chapter 15 recognition proceeding is an ancillary proceeding in which the U.S. court acknowledges the foreign proceeding and gives it effect under applicable U.S. law.
The Delaware Court of Chancery’s recent opinion in Cygnus Opportunity Fund LLC et al. v. Washington Prime Group LLC et al. presents a veritable grab bag of potential blog posts, from a suggestion that an officer of an Limited Liability Company could be contractually bound by an LLC Agreement he never signed to the interesting interplay (and potential conflict) between an officer’s duty of obedience to the LLC’s board and the officer’s duty of disclosure to investors.
The English court has (for the first time) given guidance on the long-established practice of substituting a creditor as petitioner in a winding up petition and hearing argument about the creditor’s standing later.
Background
In March 2021, Citibank petitioned to wind up Liberty Commodities (LCL). The petition was supported by two creditors, White Oak and NPS. Citibank settled with LCL and applied to dismiss the petition. The supporters applied to be substituted.
A recent decision of the German Federal Court of Justice (Bundesgerichtshof) has extended the liability of legal advisors in crisis situations.
Background
Under German law, a lawyer may be liable not only to his client, but also to a third party, if the third party has a special interest in the lawyer's performance. The Bundesgerichtshof has clarified that managing directors and even shadow directors may have such a special interest and may claim damages from their company’s legal advisor for breach of duty (Pflichtverletzung).
Austria implemented the directive on preventive restructuring frameworks more than two years ago, in July 2021. In a first ruling on the proceedings, the Vienna Higher Regional Court has reaffirmed the prerequisites for entering preventive restructuring and clarified the checks to be carried out by the courts at the opening of the proceedings.
Decision
The Court held that:
On 12 September 2023, the government published its long-awaited response to its consultation on the future of insolvency regulation.
The reforms will introduce: