In Yeo, in the matter of Ready Kit Cabinets Pty Ltd (in liq) v Deputy Commissioner of Taxation,[1] the Court considered whether payments made to the Deputy Commission of Taxation (DCT) by a director of the company, required under a Deed of Company Arrangement (DOCA) were recoverable as unfair preferences.
The Abu Dhabi Global Market (ADGM)continues to enhance its legislative framework after recently publishing its fourth round of amendments to the ADGM Insolvency Regulations 2015.
As part of the latest round of amendments, the ADGM has introduced a new chapter dealing with priority funding (PDF), similar to US Chapter 11 style debtor-in-possession (DIP) funding.
The COVID-19 pandemic is upending economies globally, causing a wave of unexpected insolvencies. The businesses that remain standing may face the question: will my insolvency or that of my counterparty prevent me from resolving disputes by arbitration?
The short answer is no. However, depending on the jurisdiction, there will be some limitations on what can be decided by arbitration. We have therefore briefly summarized some of the issues and challenges that a party may face under US law in the context of an arbitration arising from its own or an opposing party’s insolvency.
On 13 December 2019, in Franz Boensch as Trustee of the Boensch Trust v Scott Darren Pascoe[1] the High Court unanimously dismissed an appeal from a judgment of the Full Court of the Federal Court of Australia, in which the appellant sought compensation from his former trustee in bankruptcy pursuant to section 74P of the Real Property Act 1900 (NSW) (RPA).
On 26 June 2020 the Corporate Insolvency and Governance Act 2020 (the Act) came into force. The Act marks the most significant insolvency reforms in a generation. It doesn’t just deal with measures required to tide companies through the COVID-19 pandemic but includes far-reaching wholesale reforms to the UK’s restructuring toolbox, including the introduction of the restructuring plan, which has the potential to be a gamechanger for restructurings.
There are two temporary measures dealing with COVID-19 impacts on companies specifically:
Whilst the power of a chairperson to exercise a casting vote at creditors’ meetings is a useful mechanism to resolve a deadlock in voting, it does not confer unconstrained discretion. The recent Glenfyne Appeal[1] provides valuable guidance as to the appropriate exercise of a casting vote and also serves as a reminder of the Court’s significant powers to review and reverse failed creditors’ resolutions due to the exercise of a casting vote.
We reported in our previous blog published on 15 June 2020 (“The Corporate Insolvency and Governance Bill – a pensions perspective”) that a number of pensions concerns had been raised about the Corporate Insolvency and Governance Bill (the Bill). As a result, the Bill was subject to significant amendment and debate from a pensions perspective in the House of Lords.
In the recent decision of Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited, the Supreme Court has overturned the Court of Appeal in upholding the practicality of adjudication by insolvent companies.
Introduction
The past decade has witnessed a significant increase in cross-border commerce involving Chinese companies. If these ventures fail, a common dilemma for our clients has been which jurisdiction they should focus their efforts on when enforcing their rights. As we explain below, the success of a cross-jurisdictional recovery claim can often depend on the important tactical decision of focusing on the correct jurisdiction(s) at the outset.
Identify all relevant jurisdictions
The new Corporate Insolvency and Governance Bill (the Bill) has been introduced into the UK Parliament and proposes significant changes to insolvency law, including: