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A recent High Court decision considered the duty of Law of Property Act (LPA) receivers when selling secured property to an associated company of the creditor. The LPA receivers were chartered surveyors, appointed by the creditor in respect of a cider factory over which it had security and were alleged to have acted in bad faith by preferring the interests of the creditor over the interests of the debtor company.
A real, as opposed to remote, risk of insolvency is not necessarily enough for the duties of a board of directors to switch from being owed to its shareholders to being owed to its creditors.
Recent Developments in Bankruptcy Law, January 2019 TABLE OF CONTENTS
1. AUTOMATIC STAY....................... 1 1.1 Covered Activities ................... 1 1.2 Effect of Stay........................... 1 1.3 Remedies ................................ 1
A Court of Appeal decision last week has broadly upheld previous TCC guidance as to the ability of companies in liquidation or those subject to CVAs to commence and enforce adjudication proceedings against their creditors. Although theoretically possible, adjudication proceedings commenced by companies in liquidation are now liable to be restrained by a court injunction. Adjudications by companies subject to a CVA are more likely to be appropriate and, depending on the circumstances, may be enforced without a stay of execution.
Insolvency set-off: a recap
The Chancellor announced in his budget that the Crown is to be re-instated as a preferential creditor in insolvency, reversing the changes brought in by The Enterprise Act 2002.
Section 108(c) applies to extend a judgment lien pending termination of the automatic stay. State law grants a judgment creditor a lien on all the judgment debtor’s personal property when the creditor obtains from the court and serves on the judgment debtor an order for appearance and examination (ORAP) to discover assets. The lien, which is not publicly recorded, lasts for one year.
In the wake of increased competition stemming from the recent liberalisation of the Bulgarian electricity market, more and more electricity players and major electricity traders such as Future Energy and Energy Financing Group are now facing serious financial difficulties.
According to reports, some are now fighting to stay afloat after the initiation of insolvency proceedings. Given this increased market pressure, analysts state it is likely these and other energy traders may declare bankruptcy and face eventual liquidation.
A draft government ordinance amending the Romanian insolvency law was published on September 12. The bill is intended to increase recoverability of state receivables from insolvent companies and to reduce the debtor’s control over the proceedings.
One of the main changes relates to denying the existing right of the insolvent debtor to nominate an insolvency practitioner to be appointed as official receiver. Under the current procedure, it was mandatory for the insolvency court to follow debtor’s proposal, if the creditors did not make a proposal of their own.