One of the largest bankruptcy orders ever made in the English courts (in the region of £870 million) has been set aside to allow a creditors’ meeting to take place in order to consider an individual voluntary arrangement. In (1)Gertner (2) Laser Trust v CFL Finance Ltd [2020] EWHC 1241 (Ch), Mr Justice Marcus Smith has held that unless a breach of the good faith rule can be established, it is inappropriate for the court to refuse an application supported by a majority of creditors to stay a bankruptcy petition.

In the recent decision of British Columbia Attorney General v Quinsam Coal Corporation, 2020 BCSC 640 (Quinsam), the British Columbia Supreme Court (the Court) considered the priority between a debtor’s environmental liabilities and a secured creditor. In its analysis, the Court extensively discussed the Supreme Court of Canada’s decision in Orphan Well Association v Grant Thornton Ltd, 2019 SCC 5 (Redwater). In reference to Redwater, the Court posed the following question:

COVID-19 has impacted all businesses and economies around the globe with a precipitous decline in demand and supply as a result of quarantine orders, business closures, and social distancing. International Monetary Fund research suggests that the world economy may shrink (in the year 2020) by 3% with the trade volume falling by 11% and the oil prices by 42% (World Economic Outlook, April 2020: The Great Lockdown). In these challenging circumstances and with significant level of debt, many companies are at the onset of insolvency.

In Toronto-Dominion Bank v Canada,¹ the Federal Court of Appeal (FCA) upheld the Federal Court’s decision² that the Toronto-Dominion Bank (TD) was required to pay to the Canada Revenue Agency (CRA) proceeds of $67,854 for unremitted GST that TD received as repayment from a borrower upon the discharge of a TD mortgage.

On May 8, 2020, the Supreme Court of Canada (SCC) released its reasons for the decision rendered in 9354-9816 Québec Inc. et al. v. Callidus Capital Corporation, et al on January 23, 2020. The SCC unanimously allowed the appeal from the Québec Court of Appeal’s decision, reinstating an order allowing third-party litigation funding in insolvency proceedings.

Background

These are unprecedented and uncertain times. Everywhere, the COVID-19 pandemic has strained revenue streams and asset prices, shaken investor and consumer confidence, and caused overall financial conditions to deteriorate. Everyone is asking the same question: How do we deal with the financial fallout of COVID-19?

In many cases, parties are working together to overcome these financial challenges, preserve value and navigate a mutually beneficial path forward.

Stephenson Harwood’s Middle East team provide top tips on how to quickly recover debt in the UAE.

The strategy we set out in this bulletin is intended to crystallise the debt in the eyes of the national courts of the UAE making recovery of the debt quicker than it otherwise might be.

Issue letters of demand

Covid-19 has brought about much uncertainty for businesses worldwide and it is timely for a special edition of Going Concerns to provide a "survival guide" in the following jurisdictions Singapore, the People's Republic of China ("PRC"), Hong Kong, United Kingdom and the United Arab Emirates ("UAE"). This special edition will also touch on recent legislation and stimulus packages introduced by governments of the above (where applicable) in response to the Covid-19 outbreak, which will impact both creditors and debtors.

Survival guide

Re Joint Provisional Liquidators of Moody Technology Holdings Ltd [2020] HKCFI 416

The Hong Kong Court has explained why there is no inconsistency between: (a) its domestic insolvency law which does not permit the appointment of provisional liquidators purely for the purposes of restructuring the company; and (b) common law recognition of foreign "soft-touch" provisional liquidators.

What is a soft-touch provisional liquidator?

Introduction

The immediate focus for Britain’s authorities when dealing with the COVID-19 pandemic has been, quite rightly, to secure the best possible health outcome for the greatest number of people.

Subsequently, following a wave of concern regarding the best way of maintaining the financial status-quo for (i) businesses, (ii) employees, and (iii) individuals, the UK government announced an unprecedented series of assistance programmes, designed to counter the impact of previously unknown, and unquantifiable, distress.