Although not directly concerned with directors' liabilities, the recent Supreme Court judgment in Stanford International Bank Ltd v HSBC Bank PLC provides further clarity on the circumstances in which a distressed or insolvent company may seek to make claims against its directors.

INTRODUCTION

The key aspects affecting directors' liabilities presented in the Supreme Court ruling are that:

The U.S. Supreme Court has ruled that bankruptcy filers cannot avoid debt incurred by another’s fraud.

The 9-0 ruling, written by Justice Amy Coney Barrett, unanimously rejected Kate Bartenwerfer's bid to use U.S. bankruptcy code protection to eliminate debts on the grounds that she was unaware of fraudulent omissions made by her husband.

At a time when, globally, insured businesses are under severe financial strain, the availability and extent of their insurance assets take on a new significance. It is significant not just for troubled businesses and their insurers, but also for third parties with potential or actual claims against those businesses.

Chapter 11 bankruptcy as a means for resolving mass tort claims

We recently had a chance to speak to The Independent and

There has been no shortage of high-profile insolvencies in the crypto market in recent months across a range of market participants and geographies. These include the US Chapter 11 and Bahamas provisional liquidation of FTX as well as the US Chapter 11 filings of BlockFi, Singapore-based crypto hedge fund ThreeArrows Capital, US-based lenders Celsius Network and Voyager Digital, US-based crypto mining data centre Compute North and German crypto bank Nuri.

In the context of a trade finance dispute, the High Court has considered the contractual interpretation of an irrevocable letter of credit incorporating the commonly used code in the Uniform Customs and Practice for Documentary Credits 600 (UCP 600), published by the International Chamber of Commerce (ICC). In particular, the court held that the issuer’s interpretation of the letter of credit would, in practice, render the instrument revocable, which was inconsistent with the UCP and therefore not the proper construction.

On October 14, 2022, the U.S. Court of Appeals for the Fifth Circuit affirmed the decision of the U.S. Bankruptcy Court for the Southern District of Texas (Isgur, J.) allowing a claim against a solvent debtor for a make-whole premium and post-default interest totaling approximately $387 million. Ultra Petroleum Corp., et al. v.

Chief Justice Hammerschlag, sitting in the New South Wales Supreme Court (the Court), has delivered a judgement of importance to secured creditor and insolvency practitioners alike in Volkswagen Financial Services Australia Pty Ltd v Atlas CTL Pty Ltd (Recs and Mngrs Apptd) (In liq) [2022] NSWSC 573 (Atlas).

The Parliamentary Joint Committee on Corporations and Financial Services (the Committee) has commenced an inquiry into the “effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy”.^[1]