We're often asked to advise on what is the appropriate level of liquidated damages for delay in a building contract. Whilst this is a commercial issue and therefore outside the remit of legal advice there are some principles relating to the application of liquidated damages that we can bring to the parties' attention.

This is the message the courts are sending to office holders seeking approval of their fees. In two recent English High Court decisions, both handed down by HHJ Cawson KC, the courts clearly expect office-holders, as fiduciaries, to produce a sufficient and proportionate level of information to justify the level of fees being claimed.

The question of whether it is competent for the court to order a retrospective administration order has been the subject of much debate before the English courts. However, until now, there have been no reported Scottish decisions dealing with the point.

Shareholder disputes can often be complex and emotionally charged, particularly in small or family-owned companies where personal relationships and business interests are deeply intertwined. When such disputes reach an impasse, the law provides several mechanisms for resolution. In particular, disgruntled shareholders have the ability to bring statutory based claims against the company.

11 U.S.C. § 1191(c)(2) provides (emphasis added):

• “(c) . . . the condition that a plan be fair and equitable . . . includes . . . (2) . . . all of the projected disposable income of the debtor to be received in the 3-year period, or such longer period not to exceed 5 years as the court may fix, . . . will be applied to make payments under the plan.”

There is little-to-no guidance in the Bankruptcy Code on what “as the court may fix” might mean. So, that meaning is left to the courts to decide.

Under 11 U.S.C. § 727(a)(2), an individual debtor may be denied a discharge, in its entirely, for making a transfer “with intent to hinder, delay, or defraud” a creditor or the trustee.

On April 17, 2023, the Bankruptcy Court for Eastern Michigan ruled:

A “silent” creditor in Subchapter V is one who does not vote on the debtor’s plan and does not object to that plan. The “silent” creditor is a problem for Subchapter V cases.

The Problem

Here’s the problem:

Buying parts of a distressed company may offer great opportunities for buyers. When a company is struggling but not yet insolvent, external financing might dry up and the sale of non-core activities may be a last resort to generate fresh cash.

Here are a couple discharge-related bankruptcy questions I’ve heard of late, along with an answer.

Question 1. Why are individuals, but not corporations, eligible for a Chapter 7 discharge?

• §727(a)(1) says, “the court shall grant the debtor a discharge, unless—(1) the debtor is not an individual” (emphasis added).

Question 2. Why are individuals, but not corporations, subject to § 523(a) discharge exceptions in Chapter 11?

The Abu Dhabi Global Market (the “ADGM”) courts have recently handed down their decision in NMC Healthcare Limited & Others v Shetty & Others ([2024] ADGMCFI 0007). The decision deals with several important principles in relation to fraudulent/wrongful trading liabilities under ADGM law. Given the ADGM re-domiciliation (or continuation) regime, enabling companies incorporated elsewhere to be redomiciled to ADGM with relative ease, the decision is likely to be of interest beyond the borders of the ADGM.