The English tax authority, HMRC, has successfully challenged the restructuring plans put forward by The Great Annual Savings Company Limited (GAS) and Nasmyth Group Limited (Nasmyth).
This is the first time that HMRC has actively challenged restructuring plans at the sanction hearing. The key takeaways from the judgments:
Nasmyth
Background
The impact of the opening of insolvency proceedings on options granted in combined contracts (for example, a lease contract containing a call option for the leased real estate) had been in dispute for a long time.
Decision
The Austrian Supreme Court held that call options granted in lease contracts where the option fee has been paid do not expire with the opening of insolvency proceedings, nor are they subject to the right of the insolvency administrator to terminate the lease contract.
The German Federal Court of Justice (BGH) has ruled on the question of whether an agreement that grants release from a contract on grounds of insolvency or the opening of insolvency proceedings is effective.
Background
In the recent case of Re JD Group Ltd in liquidation; Bhatia v Purkiss (as liquidator of JD Group Ltd) a company director appealed a decision that he was liable for VAT fraud.
Background
Mr Bhatia was the sole director of a company trading in mobile phones. He was sent a HMRC notice explaining the risks of mobile phone trading and liability for involvement in VAT fraud.
Bankruptcy Basics for New and Non-Bankruptcy Attorneys
This entry is part of Nelson Mullins’s ongoing “Bankruptcy Basics” blog series that is intended to address foundational aspects of bankruptcy for new and non-bankruptcy practitioners and professionals. This entry will discuss the general structure of bankruptcy claims and the differences between how unsecured, secured, and priority claims are treated in a bankruptcy case.
A “claim” against a bankruptcy estate is defined as a:
On 12th May 2023, the High Court of England and Wales issued another significant judgment which is expected to advance the progress of reciprocal enforcement of judgments between the courts of the United Arab Emirates (UAE) and England and Wales.
On April 17, 2023, the Fifth Circuit Court of Appeals, in Matter of RE Palm Springs II, L.L.C., 2023 WL 2966520 (5th Cir. April 17, 2023), held that a senior lender who uses economic leverage and asserts its legal rights to squeeze out a junior lender remains a good faith purchaser entitled to declare an appeal moot based on a sale under section 363(m) of the Bankruptcy Code. Key to the Fifth Circuit’s opinion was the fact that the actions in question were disclosed to the bankruptcy court in advance of it making the section 363(m) finding.
Facts
The Dutch Supreme Court ruled that "setting aside" or replacing the board is not a requirement to qualify as a de facto director. De facto directors are not required to manage the company instead of, and to the exclusion of, the formal directors.
Background
Under Dutch law, as a matter of principle, only the company (ie a Dutch B.V. or N.V.) is liable for its debts. The directors of the company are in principle not liable.
The High Court has handed down the most significant decision on restructuring plans since Virgin Active in 2021, applying cross-class cram down to an ad hoc group of dissenting noteholders (the AHG).
Background
The insolvency statistics released for March 2023 demonstrate the impact of turbulent trading climates on UK businesses, in particular soaring costs and decreased consumer spending.
The March 2023 insolvency statistics show that UK corporate insolvencies have risen 16% year-on-year and 38% since February 2023.