The Supreme Court has recently confirmed that the courts will adopt "a practical business approach (as against one which is unduly technical)" to the determination of due debts when considering a company's ability to pay its due debts.

In Re Boart Longyear Ltd (No 2) the Supreme Court of New South Wales recently approved two creditor schemes of arrangement on the application of Boart Longyear Limited. The schemes were considerably amended after the Court indicated at the first hearing that it was not likely to approve the original schemes on fairness grounds. Significantly, the Court ordered the parties to attend a mediation to resolve the fairness issues – something that has not been done before in a scheme of arrangement in either Australia or the United Kingdom.

The English Court of Appeal has recently decided that a corporation that held shares in a company remained a shareholder notwithstanding the shareholding company's dissolution.

BWE Estates Limited had two shareholders: an individual named David who held 75% of its shares and a company, Belvedere Limited, which held the remaining 25%. Although Belvedere was dissolved in 1996, it remained listed as a shareholder in BWE's share register.

In the English High Court, the joint administrators of four English companies within the former Lehman Brothers group sought directions from the Court in respect of a proposed settlement. The settlement would put to rest substantial inter-company claims including those at issue in the 'Waterfall III' proceedings.

In a second application heard on the same day, Hildyard J considered an application by the administrators of Lehman Brothers Europe Limited (LBEL) for directions that would enable a surplus to be distributed to the sole member of LBEL while LBEL remained in administration. The proposed scheme had material benefits for both shareholders and creditors. The administrators acknowledged that the orders sought were an indirect means of circumventing the Insolvency Act 1986 (UK), which does not expressly provide for directors to make distributions during an administration.

The Court of Appeal has recently dismissed an appeal from the High Court's judgment (discussed in our September 2016 update) setting aside a compromise under Part 14 of the Companies Act 1993 after finding that the challenging creditors, who had voted against the compromise, had been unfairly prejudiced by the decision to call only one meeting of creditors.

In McIntosh v Fisk [2017] NZSC 78, the New Zealand Supreme Court had to consider whether the liquidators of a Ponzi scheme were entitled to recover from an investor a payment that the investor had received shortly before the appointment of the liquidators.

In 2003 the Seventh Circuit Court of Appeals surprised many observers when it held that a sale of real property under section 363 of title 11 of the United States Code (Bankruptcy Code) could be approved free and clear of a lessee’s leasehold interest in the property. Precision Industries, Inc. v. Qualitech Steel SBQ, LLC (In re Qualitech Steel Corp. & Qualitech Steel Holdings Corp.), 327 F.3d 537 (7th Cir. 2003) (Qualitech).

Being inexperienced can contribute to getting into disciplinary trouble, but it can also be a mitigating factor in a bar disciplinary case. That’s the message of a recent opinion of the Oklahoma Supreme Court, which imposed a six month suspension from state practice as reciprocal discipline on a lawyer who had already been suspended from federal bankruptcy court practice for five years.

Raising the risk?

The case of Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch) concerned the liability of a stockbroking company for failing to investigate fraudulent transactions.