How does an arbitration clause, or an exclusive jurisdiction clause in favour of foreign courts, affect insolvency proceedings?
The effect of an arbitration clause, or an exclusive jurisdiction clause in favour of foreign courts, on insolvency proceedings has been a topic of longstanding debate in the Courts of Hong Kong, England and other common law jurisdictions.
Court awards first security for costs order in respect of a challenge to a restructuring plan.
Key takeaways
The High Court has for the first time awarded security for costs in respect of a challenge to a proposed English restructuring plan.1
Reform of our Australian bankruptcy landscape has been the focus of policymakers for some time. The new changes lead by the Attorney-General’s Department, will see the implementation of reforms to the Bankruptcy Act 1966 (Cth) (Bankruptcy Law Reforms) and further consultation on a Minimal Asset Procedure (as foreshadowed during our recent Personal Insolvency Forum) (Minimal Asset Procedure). A further development regarding the treatment of capital gains tax (CGT) is included in this update.
The U.S. Supreme Court reversed confirmation of Purdue Pharma’s Chapter 11 bankruptcy plan of reorganization on the basis that its non-consensual third-party releases were not permissible. It held that the Bankruptcy Code does not authorize the inclusion of a release in a plan that effectively seeks to discharge claims against a non-debtor without the consent of affected claimants. The decision prohibits an approach to global resolution of mass tort litigations that has been utilized in numerous cases over the last 40 years.
Takeaways
In this alert, we consider the implications from the recent High Court judgment finding two former directors of BHS liable for various heads of wrongdoing, including wrongful trading and "misfeasant trading".
What Directors need to know
Opinion has potential implications for a broader set of parties with potential liabilities affected by a Chapter 11 process.
International Pte Ltd [2024] SGCA 10 is a landmark case by the Singapore Court of Appeal that sets the test for how Singapore courts should in future approach the question of directors duties when a company is facing financial difficulties. It makes clear that the financial state of the company is an important consideration which a director should bear in mind, as it is the indicia of a shift in the economic interests in the company from the shareholders to the creditors.
Key takeaways
1. Is a letter of support from your immediate holding company sufficient to satisfy the solvency test?
The FTX Group, an international cryptocurrency exchange platform, spectacularly collapsed in November 2022, resulting in FTX Trading Limited and 101 affiliated companies filing for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in Delaware. The Australian arm of the FTX group, FTX Australia Pty Ltd (‘FTX Aust’) and FTX Express Pty Ltd (‘FTX Express’) (collectively the ‘Companies’) was placed into administration in Australia shortly before the Chapter 11 filing.
On 23 January 2024, Snowden LJ handed down the Court of Appeal's judgment in the Adler Restructuring Plan case - AGPS Bondco plc - overturning the sanctioning of the Plan by the High Court in April 2023.