In its unanimous decision, Ernst & Young Inc. v. Aquino, the Ontario Court of Appeal modified the common law doctrine of corporate attribution in the bankruptcy and insolvency context to uphold a decision of Ontario Superior Court’s Commercial List, which ordered a corporate officer and his associates, whom collectively orchestrated a fraudulent invoicing scheme, to repay over $30 million to company creditors pursuant to s. 96 of the Bankruptcy and Insolvency Act (“BIA”).
Background
When one party can unilaterally prevent a bankruptcy filing – action steps and best practices
Commodities Alert
Restructuring Alert
Winter is here, with the attendant risk of another major weather event impacting the energy production industry, and, specifically, the wind power generation industry in Texas. Last year, Winter Storm Uri significantly disrupted the Texas power grid and forced several energy originators, distributors, and buyers to consider restructuring alternatives.
The persisting spectre of the pandemic continues to create uncertainty in the market. Over the last 18 months, insolvency figures remained consistently low due to the government support which has been in place. With the prospect of that support coming to an end there is likely to be a reckoning, but when that will begin is unclear. Overall, this next year is likely to be one of resolving loose ends and tidying up before the economy can take off afresh.
Market outlook
This is the second article in 'Back to Basics', a series of articles looking at insolvency processes in Scotland. This article will examine the court process for sequestration, focusing on petitions by creditors.
In August 2021 the Italian government, led by Mario Draghi, enacted a Law Decree (no. 118) to issue “urgent measures to deal with companies’ and entrepreneurs’ crises and subsequent restructuring and other urgent measures for the justice system.” On October 23, 2021, the Law Decree no. 118 was converted into Law no. 147/2021 (Law 147). The new tools introduced by Law 147 have been put in place to deal with entrepreneurs in crises that need an urgent turnaround, including during the ongoing COVID-19 emergency.
The full written judgment of Sir Alastair Norris in respect of the sanction of the Part 26A restructuring plan for Amicus Finance PLC (in administration) was belatedly handed down last week. As we reported in August (linked here), Amicus is the first company in administration to implement a Part 26A restructuring plan, which was fiercely contested by one of the creditors of the Group, Crowdstacker.
The UK Government has announced changes to the regime for winding-up petitions. With effect from 1 October 2021, some of the protections currently afforded to businesses against aggressive debt recovery action are being phased out.
The changes are intended to avoid a 'cliff edge' for debtor companies when the current measures lapse at the end of September 2021, and have a tapering effect to avoid the flood of winding-up petitions that might otherwise be expected.
What are the current restrictions (in place until 30 September 2021)?
This is the first article in 'Back to Basics', a series of articles looking at insolvency processes in Scotland. In this article I examine the court process for winding up a company.
A winding up petition is a form of legal action that can be used when a company is unable to pay its debts as they fall due. Sections 122 to 124 of the Insolvency Act 1986 (‘the Act’) deal with how to wind up a company in Scotland.
When is a company deemed unable to pay debts?
The Federal Labour Court (Bundesarbeitsgericht – BAG) has ruled on 18 May 2021 (docket number 3 AZR 317/20) that in the case of the PSV’s assertion of claims against the insolvency administrator of an insolvent company, it is not the balance sheet interest rate used for the calculation of the pension provisions that is applicable, but the standard statutory interest rate according to section 246 German Civil Code (BGB). Only this interest rate is decisive for the calculation of the amount of claims.
Facts / Background: