On 23 June 2015, the Italian Cabinet approved Law Decree No. 83 which amends Royal Decree No. 267 16 March 1942 (the “Bankruptcy Act”), the civil code and the code of civil procedure, and certain tax provisions (the “Decree”). The amendments aim to facilitate debt restructurings, support distressed companies in their turnaround attempts, and foster quicker liquidations in bankruptcy proceedings.

Interim Financing

Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the “Regulation”) reforms the former European Regulation on Insolvency proceedings (EC) 1346/2000 (the “Original Regulation”). The aim of the Regulation, in particular, is to enhance the effective administration of cross-border insolvency proceedings, establishing a common framework for the benefit of all stakeholders.

The main features of the Regulation are:

The most recent decisions (by judges in Delaware and several other relevant jurisdictions) hold that fiduciary duties are owed to the corporation that the director and officer is serving and do not change whether the corporation is solvent, approaching insolvency (described as the “zone of insolvency”), or insolvent.

Key Points:

These three cases illustrate that strict compliance with legislative requirements continues to be imperative when serving statutory demands.

Despite what appears to be a fairly straightforward legislative regime, creditors' statutory demands appear to generate an entirely disproportionate volume of litigation in the courts. The drastic consequences of failing to comply with a creditor's statutory demand warrant very strict compliance by creditors with the technical requirements of the regime.

Orla McCoy explains the connections between retention of title clauses, insolvency, and the Personal Property Securities Act.

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Since at least the Delaware Supreme Court’s 2007 landmark decision in N. Am. Catholic Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 101 (Del.

The unitranche financing market has expanded significantly in recent years. Generally, a unitranche deal involves two lenders (or groups of lenders) that provide financing on a “first out” and “last out” basis. In conjunction with the financing, the borrower grants one lien and enters into a single credit agreement and the lenders enter into an “Agreement Among Lenders” (“AAL”). An AAL is similar to an intercreditor agreement and provides for certain rights and remedies of the lenders.

Key Points:

Principals or contractors dealing with insolvent downstream companies should ensure they can properly substantiate any counterclaims.

Usually a principal is not entitled to rely on a set-off or counterclaim to resist court proceedings to recover a debt under the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOP Act). However because of the operation of section 553C of the Corporations Act, the situation is different if the claimant is in liquidation.

Insolvent subcontractor’s claim

Key Points:

There are three things prudent insolvency practitioners can do when left with non-company assets.

A not too infrequent issue for insolvency practitioners: what can you do with unclaimed assets of third parties? Clayton Utz recently acted for the receivers and managers of Arcabi Pty Ltd (In Liquidation) (Receivers and Managers Appointed) (known as “The Rare Coin Company”) and developed a strategy to deal with the issue.

Background

Key Points:

Courts will limit an administrator's liability where proposed funding is to be used directly to advance an agenda consistent with the objects of Part 5.3A of the Corporations Act.

A recent decision of the NSW Supreme Court highlights the flexibility of Part 5.3A of the Corporations Act and the ability of administrators to seek orders protecting their interests and facilitating restructures, and was the first stage of what promises to be a novel and challenging administration (In the matter of Nexus Energy Ltd [2014] NSWSC 1041).