As participants in the Australian debt restructuring market continue to innovate we expect to see an increase in these control transactions, testing further again the Australian statutory regimes.

The Virgin sale shows the flexibility of Australia's restructuring regime and sets a significant judicial precedent for future control transactions.

Virgin Airlines restructured through voluntary administration

On 20 April 2020, Virgin Australia and a number of its subsidiaries were placed into voluntary administration owing $7 billion of debt to around 12,000 creditors with partners at Deloitte Australia being appointed as joint and several voluntary administrators of Virgin. Clayton Utz was appointed to act for the Administrators.

Overseas developments might have inspired mooted changes to create a debtor in possession model in Australia.

2021 began with a sense of optimism, but COVID-19 is continuing to wreak havoc on the Australian economy. The Commonwealth Bank of Australia is forecasting a 0.7% decline GDP in the September quarter and a likely rise in unemployment in July. New South Wales in particular, is expected to be hit very hard.

Unusual circumstances have spurred innovation and ground-breaking responses which will reshape restructuring and insolvency.

Just when you thought it was safe to return to your favourite local restaurant and that COVID-19 had exclusive rights to 2020, we find ourselves once again working from home and having to cope with the lingering effects of the virus. Unfortunately for corporate Australia, the COVID virus is as contagious as it always was for your business… but there is a light at the end of the tunnel for some.

In a somewhat unexpected development given his recent appointment to a second 14-year term a mere 5 years ago, Bankruptcy Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York announced that he intends to retire as of June 30, 2022.

High Court sanctions scheme of arrangement proposed by the Provident Finance group

The new month sees a partial re-instatement of the legislation permitting creditors to serve winding up petitions on companies. However, the UK Government has adopted a softly, softly approach; this is seen from the temporary increase in the amount that must be owed from the modest £750 to £10,000 and the requirement for creditors to seek proposals for payment from a debtor business, giving them 21 days for a response, before they can proceed with winding up action. The measures are said to protect small businesses as they seek to rebuild their stability.

On September 1, 2021, Judge Robert Drain issued a much-anticipated oral ruling approving Purdue Pharma L.P.’s plan of reorganization. The plan, which has garnered significant attention from the media, legislators, academics, and practitioners, releases current and future members of the Sackler family and many of their associates and affiliated companies – none of whom filed for bankruptcy themselves – from liability in connection with any possible harm caused by OxyContin and other opioids that Purdue Pharma manufactured and distributed.

Kwasi Kwarteng, UK Business and Energy Secretary is reported to have said on 20 September that “My task is to ensure that any energy supplier failures cause the least amount of disruption to consumers”.

Wholesale day-ahead gas prices in the UK are reported to have jumped some 9% on 20 September alone. The rise is as a result of a number of factors including increased demand in Asia, lower supplies of gas from Russia and increase in demand as countries emerge from lockdown restrictions and economies start to pick up once more.

With the Act on the Temporary Suspension of the Insolvency Filing Obligation Due to Heavy Rainfall and Floods in July 2021 (Gesetz zur vorübergehenden Aussetzung der Insolvenzantragspflicht wegen Starkregenfällen und Hochwassern im Juli 2021), which is part of the Reconstruction Assistance Act 2021 (Aufbauhilfegesetzes 2021), the German Federal Parliament and the German Federal Council have decided to suspend the obligation to file for insolvency retroactively as of 10 July 2021.