Key Takeaways
In welcome news for insolvency practitioners, the Supreme Court has limited the circumstances in which a dissatisfied bankrupt will have standing to challenge a trustee in bankruptcy's decisions or actions under section 303(1) of the Insolvency Act 1986 (Act), to those where there is likely to be a surplus in the bankruptcy estate (subject to only very limited exceptions). The Supreme Court acknowledged that, while this decision is about bankruptcy, the reasoning will also apply to challenges to liquidators' decisions under section 168(5) of the Act.
In welcome news for insolvency practitioners, the Supreme Court has limited the circumstances in which a dissatisfied bankrupt will have standing to challenge a trustee in bankruptcy's decisions or actions under section 303(1) of the Insolvency Act 1986 (Act), to those where there is likely to be a surplus in the bankruptcy estate (subject to only very limited exceptions). The Supreme Court acknowledged that, while this decision is about bankruptcy, the reasoning will also apply to challenges to liquidators' decisions under section 168(5) of the Act.
Duties and Implications of financial Information in s.214 claims
Introduction
This article follows Part 1 in which I set out the key issues we have recently seen and the case law arising in Misfeasance and Wrongful Trading claims. This Part 2 considers the duties and implications surrounding the financial information that is available to directors when faced with a s.214 wrongful trading claim.
This article is a part one of two series that explores the key issues we have recently seen and the case law arising in Misfeasance and Wrongful Trading claims.
Introduction
What is Wrongful Trading?
Selon Paul Chollet, économiste de Crédit Mutuel Arkea 2024 sera "une année noire" avec un record de défaillances d’entreprises en France. Cela fait maintenant 3 ans que les économistes prédisent un ras-de-marrée de défaillances. Cela étant, avec près de 49.000 de défaillances en France sur 12 mois glissants, il y a une tendance à un retour aux chiffres de 2019.
Il est donc indispensable de rappeler que des procédures de prévention (mandat ad hoc et la conciliation) sont là pour traiter les difficultés en amont de la défaillance.
The restructuring of Casino Group, one of France's top 6 retailers, is at the point of reaching a favourable outcome. An agreement is expected at the end of July 2023. The commonalities between the restructuring of Casino and Orpéa are the preservation of secured debt, the conversion of unsecured debt into capital, asset disposals and, of course, a significant injection of new money.
In Re Guy Lam Kwok Hung [2023] HKCFA 9, the Court of Final Appeal clarified when a debtor can resist a bankruptcy petition based on an exclusive jurisdiction clause (EJC) in his contract with the petitioner creditor. It is important to appreciate the Court’s reasoning and how it can be applied to various factual scenarios.
The characterisation of a charge as fixed or floating can have significant ramifications for the chargee on chargor’s insolvency. This is because the holder of a fixed charge enjoys significant advantage, in terms of the order of priority of distributions to creditors, over a floating charge holder.
The English Court has refused to sanction two separate restructuring plans proposed by Nasmyth Group Limited (Nasmyth) and The Great Annual Savings Company Ltd (GAS). Both companies sought to use Part 26A of the Companies Act 2006 to “cram down” His Majesty’s Revenue and Customs (HMRC). Whilst neither decision is the first time that Part 26A has been used in this way1, they are the first to involve any active participation by HMRC in the sanction hearing2.
Globalisation means that the effects of a business entering insolvency proceedings rarely stay within the territorial confines of a single jurisdiction; one need only look to the recent cryptocurrency bankruptcies as evidence of this. Cross-border insolvencies are no longer the preserve of large multinational corporation failures. Globalisation and the advent of digitisation mean that even small enterprises have customers, assets, and suppliers in multiple countries. This is particularly so across Asia.