The High Court in Singapore has ordered the winding up of Hodlnaut Pte Ltd, a Singapore based cryptocurrency lending and borrowing platform, as it was cash flow insolvent given that the cryptocurrency funds held by the company from various creditors count as ‘debts’ within the meaning of s125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA).
In brief
The Federal Court has recently conferred examination powers on an offshore trustee who was foreign representative for the purposes of obtaining Model Law recognition of a Swiss insolvency proceeding for the purposes of undertaking public examinations in Australia.
The decision is a reminder of the flexibility of the Model Law in assisting the recovery of assets and claims in aid of a foreign insolvency proceeding.
Key takeaways
Assume that you have a company which has ceased trading and is left with a cash balance. You could extract most of the cash by paying a dividend, but that would be inefficient for tax purposes (resulting in tax rates of up to 39.35%). So, instead, you decide to wind the company up and receive the proceeds as a capital distribution, taking advantage of the lower capital gains tax rates (generally at 10% or 20% depending on the circumstances). Surely that is legitimate?
In brief
On 1 November 2023, the Luxembourg law dated 7 August 2023, issued from Draft Bill No. 6539A on business preservation and modernization of the insolvency law ("Law" or "Reform"), entered into force.
While initial discussions leading to this Reform started about ten years ago1, the need for suitable instruments to address financial difficulties in businesses was further emphasized by the pandemic, resulting in a notable increase in bankruptcies in Luxembourg since 2021.
As a director of a company, the regulatory landscape in England and Wales can feel like a scary place. The possible ways a director can become exposed can feel endless – especially if one asks Google.
Just ask any corporate lawyer fortunate enough to own the tome that is the Companies Act 2006. In the absence of becoming a legal expert, what can directors practically do to best protect themselves when carrying out their role?
Following the news of Birmingham City Council’s recent ‘bankruptcy’, it began a procedure under section 114 of the Local Government Finance Act 1988 which triggers an interim spending freeze whilst a mandatory review is carried out.
Those who transact with local authorities may be unsure of what the impact of such a notice means for their ongoing deals and existing contracts. This article aims to demystify the process and explain the potential impact on property transactions, including issues to consider for existing agreements with a local authority.
In brief
A selection of newly announced legislation and court decisions reinterpreting private law.
Contents
In brief
A selection of newly announced legislation and court decisions reinterpreting private law.
Draft law on preventive restructuring
One of the benefits the US Bankruptcy Code offers debtors is the ability to assign freely contracts under which the debtor has ongoing performance obligations, even if the underlying contract contains a restriction or prohibition against such assignment. Section 365 of the Bankruptcy Code has its limits and does impose certain conditions to such assignment, such as the curing of defaults under the contract (other than so-called “ipso facto” defaults) and the requirement that the assignee be capable of future performance under the contract.