The Privy Council has recently upheld a BVI judgment refusing stay of a winding up petition in favour of arbitration. The recent Sian Participation Corp (In Liquidation) v Halimeda International Ltd1 Privy Council decision provides much needed clarity on the exercise of the Court’s discretion to wind up a company where the debt is not disputed on genuine and substantial grounds and is subject to an arbitration clause.
Although there are occasions when formal insolvency proceedings are unavoidable, there are many cases where a consensual, out-of-court approach is more appropriate and desirable.
We are often engaged to assist creditors, directors and other stakeholders with negotiating standstill agreements or restructuring support agreements to give breathing space to put new terms in place and allow the relevant corporate entity (or group) to continue as a going concern.
In its recent opinion in Raymond James & Associates Inc. v. Jalbert (In re German Pellets Louisiana LLC), 23-30040, 2024 WL 339101 (5th Cir. Jan. 30, 2024), the Fifth Circuit held that a confirmed bankruptcy plan enjoined a party from asserting certain indemnification counterclaims against a plan trustee because the party did not file a proof of claim.
Background
We have published a series of articles dealing with directors’ duties in the zone of insolvency.
Is it possible for a debtor company to issue debt (such as bonds) and contractually agree for that debt to rank lower in priority than debts owed by a company to other unsecured creditors? This article examines the commercial uses of subordinated debt agreements, and considers how courts in the offshore jurisdictions of the British Virgin Islands, the Cayman Islands and Bermuda would treat a subordinated debt agreement in a winding-up.
Two recent cases out of the Third Circuit and the Southern District of New York highlight some of the developing formulas US courts are using when engaging with foreign debtors. In a case out of the Third Circuit, Vertivv. Wayne Burt, the court expanded on factors to be considered when deciding whether international comity requires the dismissal of US civil claims that impact foreign insolvency proceedings.
Russell Crumpler & Christopher Farmer (as Joint Liquidators of Three Arrows Capital Ltd (in Liquidation)) v Three Arrows Capital Ltd (in Liquidation) and BVIHC (Com) 2022/0119 (unreported 26 July 2023)
Whether a solar system is a “fixture” sounds like a mundane legal issue – but it has significant implications for the residential solar industry and for the financing of residential solar systems. If a system is regarded as a “fixture” of the house to which it is attached, then the enforceability and priority of the finance company’s lien on the system will be subject to applicable real estate law.
Key Takeaways