Shareholders are among the many who have lost money in the multi-billion euro insolvency of the former DAX30 payment provider Wirecard and its allegedly fraudulent business practices. Wirecard had to file for insolvency after assets worth €1.9bn could not be found. Collectively, the shareholders claimed around €7bn in damages for intentional capital markets law violations by former Wirecard executives. Unsurprisingly, the shareholders are now trying to minimise their losses and secure at least partial payment on their claims from the insolvency estate.
When an Event of Default is "continuing" is not defined or addressed in the ISDA Master Agreement. Until now it does not appear to have been expressly considered in case law either.
As expected, the UK's latest quarterly company insolvency statistics, published on 28 October, follow the pattern of previous quarterly updates this year with the number of insolvencies continuing to rise in comparison with both the equivalent quarter in 2021, and pre-pandemic.
With the temporary insolvency measures implemented under the Corporate Insolvency and Governance Act no longer in force, the Q3 2022 data shows a significant increase in insolvencies from Q3 2021, with the overall number of registered company insolvencies 40 per cent higher.
As the tile suggests the state of recognition and assistance jurisprudence & practice in Hong Kong is less than clear. This follows the recent (mostly) conflicting 1st instance decisions of Up Energy and Global Brands. Here are my views about (i) what I believe is settled; (ii) the points of judicial difference; and (iii) what remains unclear.
Settled
The Supreme Court has handed down its long-awaited judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 25.
Basic facts
Summary
The Supreme Court held that when directors know, or ought to know, that the company is insolvent or bordering on insolvency, or that an insolvent liquidation or administration is probable, they must consider the interests of creditors, balancing them against the interests of shareholders where they may conflict. The greater the company’s financial difficulties, the more the directors should prioritise the interests of creditors.
Background
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New developments regarding Spanish pre-insolvency restructuring tools
6 September 2022
The Law 16/2022, of 5 September for the amendment of the Spanish Insolvency Law that transposes Directive 2019/1023 (Directive on restructuring and insolvency) (the Law) has been published today in the Spanish Official Gazette. The Law will enter into force on 26 September 2022 (excluding some articles).
The Law sets out structural reforms in pre-insolvency and insolvency regulations to achieve the following goals:
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Reestructuraciones de empresas en crisis Novedades en la Ley Concursal espaola
6 de septiembre de 2022
La Ley 16/2022, de 5 de septiembre, de reforma del texto refundido de la Ley Concursal que traspone la Directiva 2019/1023 sobre reestructuraciones e insolvencia (la Ley) ha sido publicada hoy en el BOE. La Ley entrar en vigor el 26 de septiembre de 2022 (salvo alguna excepcin).
La Ley acomete una reforma estructural en el mbito preconcursal y concursal con numerosas novedades y con los siguientes objetivos:
In the latest edition of Going concerns, Stephenson Harwood's restructuring and insolvency team covers the use of lock-up agreements in schemes of arrangements, and the developments in Singapore and Hong Kong as regards recognition of foreign insolvencies. Our final article is a must-read for lenders, discussing the circumstances under which security may be unwound as a undervalued transaction.
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