EMPLOYMENT (news)

Diversity in boards of larger companies

Targets (i.e., at least 30% women) imposed by Dutch law for a more balanced composition of the executive and supervisory boards of ‘large’ companies shall cease to exist as of 2020. A ‘large’ company is a company that meets two of the following requirements: (i) EUR 20 mio balance sheet total; (ii) net turnover of EUR 40 mio; and (iii) 250 employees. This does not, however, mean that diversity is no longer on the agenda of the Dutch Government.

Claims trading has become increasingly commonplace in today’s bankruptcy cases, typically with little need for policing by the courts.

In December 2017, Congress passed and President Trump signed the Tax Cuts and Job Act of 2017 (TCJA). Effective as of Jan. 1, 2018, the TCJA is a wide-ranging change to the Internal Revenue Code of 1986 (the Tax Code) affecting individual, corporate, and international taxation.

Lost amongst the many commentaries are two changes that have a negative impact on business debtors under the Bankruptcy Code: (1) reduction of the corporate tax rates and (2) elimination of the ability to carry back net operating losses.

Historically, German insolvencies have been perceived as extremely unattractive, particularly because they were dominated by court-appointed bankruptcy administrators, with limited to no influence for creditors. This has, however, significantly changed over the last years. In that respect, it was the clearly expressed intention of the German legislature to make insolvencies more attractive for all parties involved. However, the available powerful features are often still unknown and hence not used, in particular by foreign investors.

Two recent decisions have determined the applicability of security for payment legislation to insolvent contractors. One decided that the legislation does not apply to contractors in liquidation. The other decided that the legislation can be used by bankrupt contractors. At first glance, the decisions seem to be at odds, but on closer analysis the two decisions are not inconsistent.

You may recognise the quote in the title from the film "Ron Burgundy – Anchorman" about our favourite newsreader from San Diego in the 80's. Of course he was talking about a street fight with news teams from other San Diego stations but could just as easily been talking about the seemingly sudden financial demise of the Hanjin shipping line.

A problem often faced by creditors is how to recover unsecured judgment debts. If a debtor owns real property, there is a mechanism available through the Courts to have the debt registered against the property and the sheriff's office sell the property to satisfy the judgment debt.

On 1 June 2016 the Victorian Court of Appeal delivered its judgment in Timbercorp Finance Pty Ltd (In Liquidation) (Timbercorp) v Collins (Collins) and Tomes (Tomes) [2016] VSCA 128, the latest in a string of Timbercorp cases.

The latest decision was preceded by a class action which went all the way to the High Court in which the investors lost their claim against Timbercorp for misleading representations.

I sense a sea change in the recent Delaware decision in Intervention Energy Holdings, LLC, 2016 WL 3185576 (6/3/16), refusing to enforce a bankruptcy proofing provision of a Delaware LLC’s operating agreement. Until recently, the trend had been to accept the fundamental principles of bankruptcy remoteness, although courts sometimes found ways to avoid honoring anti-bankruptcy devices in specific cases.

By its much anticipated yet hardly surprising judgment in Forge Group Power Pty Limited (in liquidation)(receivers and managers appointed) v General Electric International Inc  [2016] NSWSC 52, the Supreme Court of New South Wales has again shone a bright light on the importance of perfection of security interests under the PPSA, and the dramatic consequences that follow for failing to do so by reason of the PPSA vesting rules.  Indeed, the failure to register in this case has had multi-million dollar consequences.