Introduction

Germany is experiencing a severe energy crisis due to the Ukraine conflict and its effect on the supply of natural gas. Energy intensive companies have seen a dramatic increase in energy costs, irrecoverable from consumers, causing grave financial distress in various German industries. As a result, the German government plans to modify the German Insolvency Code (InsO) on a temporary basis. 

Background 

Introduction

After much anticipation, the UK Supreme Court has handed down its judgment in BTI 2014 LLC v Sequana S.A. [2022] UKSC 25 - and has authoritatively set the baseline for how directors’ duties evolve as regards shareholders and creditors’ interests when a company is in the zone of insolvency.

Background

Summary

The Grand Court of the Cayman Islands (Kawaley J) handed down a recent decision appointing receivers over a segregated portfolio, in the case of In the Matter of Green Asia Restructure Fund SPC[1].

Since 2021, soaring wholesale energy costs have caused concern for businesses already battling a difficult economic climate with wider inflationary pressures, such as higher interest rates.  

The government's mini-budget on 23 September 2022 cancelled the planned increase in the corporate tax rate (the proposed increase from 19% to 25%). This will assist those companies which are profit-making, but without support to reduce the cost base, this provides limited relief to others.

The Supreme Court has unanimously dismissed the appeal of the decision in BTI –v- Sequana.

At a time when many companies are facing financial difficulties and directors are considering their legal duties, this long-awaited judgment has confirmed that directors have a 'creditor interest duty' when a company is insolvent or bordering on insolvency or an insolvent liquidation or administration is probable.  

Background

The High Court has recently held that the appointment of administrators by a sole director of a company with unamended Model Articles was valid.  

Background 

The document allegedly appointing the administrators of the company was a standard set of board minutes, reportedly chaired by a man and recording that a quorum was present. In fact, there was no meeting, and the decision was taken alone by the sole female director. 

The recent High Court decision in Re Nostrum Oil & Gas plc [2022] EWHC 2249 (Ch) considers a scheme of arrangement where creditors are the target of Russian sanctions. 

Background