A recent High Court case involving unlawful loans to directors illustrates the potential pitfalls involved in calculating limitation periods, and the circumstances in which the usual six year statutory limitation period will not apply to a recovery claim against a fiduciary.

Facts

Broadside Colours and Chemicals Ltd was a family firm supplying dyes to the textile trade. The directors were Geoffrey Button, his wife Catherine Button, and their son James Button. Only the father and son were shareholders.

The global crisis and the rights of foreign creditors of Sovereign States

The global financial crisis has been well documented in the press, with one recent headline in The Times reading “Like Iceland, Ireland can refuse to pay up”. Claims that States face bankruptcy not unnaturally raise the alarm bells for the financial markets. Can States be sued if they default in payment? RPC recently enforced a claim against assets of an EU State, as discussed below...

Bankrupt States: A misnomer

In the European Union, Stat e interventions in the market in the form of subsidies or other economic advantages are generally prohibited, but companies can receive aid from Member States if the aid is approved by the European Commission.

Since 2005, pushed by the insolvencies and rescues of large Italian corporations such as Parmalat, Cirio and Alitalia, the Italian legislature has introduced effective tools aimed at preserving the debtor’s assets and ensuring the successful reorganisation of a debtor’s business to the benefit of all the parties involved.

Tax authorities have perceived recently that international corporate groups are going through internal business restructurings in large part or in whole to achieve income tax savings.

The German Government has introduced a reform of the German Insolvency Code (Insolvenzordnung– InsO) in order to further facilitate business restructurings in Germany.

In Germany, the restructuring of companies or groups in financial crisis is subject to significant tax risks.

It has become common in financings for companies to utilise a capital structure with multiple layers or tranches of debt.

One thing companies often overlook in a restructuring plan is the role of communications.

Chapter 15 of the US Bankruptcy Code enables debtors that are already subject to a foreign insolvency proceeding to receive assistance from US courts in order to protect and administer their property located in the United States.