Executive Summary

Alex Jay, Head of Insolvency and Asset Recovery, discusses how companies can protect themselves from rising insolvency risks as businesses begin to emerge from the pandemic and commercial pressure increases.

Insolvency risk can affect businesses and individuals in a number of ways.  Markets can turn rapidly – think for example of the recent spate of energy company failures – and can catch you off guard.

22 October 2021 sees the return of winding-up petitions without heavy restrictions. It marks the first day in 18 months that a creditor could present a winding-up petition without having to consider the financial implications of Covid-19 on the company.

A recent High Court judgment has provided some clarity on issues arising from the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the Regulations 2020”). Partner Alex Jay and Senior Paralegal Aarti Chadda examine the judgment and its interpretation of the Regulations 2020.

Executive Summary

Investor frauds never go away

Non-professional investors are often enticed by promises of high returns to place money into schemes that turn out to be scams. These schemes adopt many guises and forms. But do they ever change, and how likely are they to emerge as the expected post-Covid economic uncertainty takes effect? Head of Insolvency and Asset Recovery Alex Jay examines investor fraud and how the insolvency process can help victims recover some of their money.

Increases in fraud and insolvency predicted

Overview

A series of related decisions issued by the United States Bankruptcy Court for the Southern District of New York in the ongoing Fairfield Sentry U.S. redeemer litigation — Fairfield Sentry II,¹Fairfield Sentry III,² and Fairfield Sentry IV³ — provide insight into, among other things, the interplay between the safe harbor provision of section 546(e)⁴ of the Bankruptcy Code (the “Safe Harbor”) and chapter 15.

In a recent decision, the U.S. Bankruptcy Court for the District of New Jersey denied a debtor’s motion to reject a contract as executory under section 365 of the Bankruptcy Code, holding that the prepetition entry of a court order which required specific performance of a contract rendered the contract non-executory and, therefore, non-rejectable. In re Bennett Enters., Case No. 20-23761 (JNP), 2021 Bankr. LEXIS 625 (Bankr. D.N.J. 2021) (“Bennett Enterprises”).

Background

With data privacy issues constantly in the news, what do businesses need to know about handling personal information when they’re considering bankruptcy, especially if some personal information – like customer records – may be a valuable asset?