On May 5, 2020, Judge Mary Walrath of the United States Bankruptcy Court for the District of Delaware delivered a bench ruling that denied a minority shareholder’s motion to dismiss the Chapter 11 cases of Pace Industries and certain of its affiliates on the grounds that the shareholder’s contractual right to block a bankruptcy filing under the debtor’s certificate of incorporation was contrary to public policy.
On 26 June 2020, The Corporate Insolvency and Governance Act 2020 (Act) became law, providing the UK (but with separate provisions for Northern Ireland) with temporary and permanent changes to insolvency law aimed at helping businesses manage the economic implications of COVID-19.
Of particular interest to the construction industry will be one of the new Act’s permanent measures relating to continuing supply.
The ongoing COVID-19 pandemic has raised pressing questions about how a force majeure provision in a lease will affect a tenant's obligation to pay rent.
Judgment has now been handed down by Marcus Smith J in another important case regarding the Lehman estate. This gives much needed clarity on how subordinated debts rank as between themselves.
The judgment concerned:
The existing jurisdictional conflict1 between US bankruptcy courts under the Federal Bankruptcy Code and the Federal Energy Regulatory Commission (FERC) regarding required approvals for a debtor in bankruptcy to reject an executory Federal Power Act (FPA)-jurisdictional agreement has also been asserted by FERC with respect to Natural Gas Act (NGA)-jurisdictiona
An unfortunate but inevitable consequence of the economic downturn induced by COVID-19 is that an increasing number of construction companies will enter into insolvency. In Bresco Electrical Services Ltd (in liquidation) v. Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25, the Supreme Court has provided some respite to contractors in liquidation by finally confirming their unfettered right to refer construction disputes for resolution by adjudication.
The Corporate Insolvency and Governance Act 2020 (CIGA) came into force on 26 June 2020, having been fast-tracked through Parliament. Although most of CIGA relates to insolvency law, the Act also makes some temporary changes to company law in the UK. The purpose of these is to give companies greater flexibility to deal with the difficulties caused by COVID-19.
Key changes
In Houston, oil is king. But this year, several energy titans are among a troubling and growing corporate list turning to bankruptcy protection. Even if the economy rebounds unexpectedly, experts expect the sharp increase in bankruptcy proceedings to continue, at least for the remainder of 2020.
Bankruptcy Boom Creates E-Discovery Issues
On 20 May 2020, the UK government introduced the Corporate Insolvency and Governance Bill (the Bill) to Parliament. The Bill went through a fast-track approval process in Parliament, received Royal Assent on 25 June 2020 and entered into force on 26 June 2020 as the Corporate Insolvency and Governance Act 2020 (the Act). The Act introduces a number of temporary and permanent measures which are designed to provide relief and support to businesses affected by COVID-19.
The Corporate Insolvency and Governance Act 2020 introduces a temporary, retrospective suspension of the directors' personal financial liability for wrongful trading from 1 March 2020 until 30 September 2020. This is not a blanket defence to a breach of duty by directors, since the directors' general duties to act in the best interests of the company (or, on insolvency, its creditors),will continue to apply.