The detrimental impact of the Corporate Insolvency and Governance Bill on defined benefit (DB) pension schemes and the Pension Protection Fund (PPF) has been highlighted forcefully by peers in the first sitting of the Committee stage in the House of Lords, which took place yesterday. The leading statements made by peers, together with the Government’s response from Lord Callanan can be found below.

The new Corporate Insolvency and Governance Bill, currently expected to be enacted in mid-June 2020, is likely significantly to impact secured and unsecured bank debt.

The High Court, in Quinn v Toon [2020] NZHC 816, confirmed that only the reasonable costs of the liquidators will be recoverable.

Ms Toon applied for orders under ss 276 and 278 of the Companies Act 1993 to approve her remuneration claiming $101,729 plus GST and expenses for her work as the liquidator of Investacorp Holdings Ltd.

This was a solvent liquidation.  While there were no creditors, there were disputes between shareholders that Ms Toon spent a considerable amount of time investigating.

As previously noted, the new Corporate Insolvency and Governance Bill, currently expected to be enacted in mid-June 2020, is likely significantly to impact many supplies of goods and services to companies that are or may be in financial distress.

In our December 2019 newsletter we commented that the Madoff bankruptcy had one more big case to go, chasing USD3.2b held by foreign banks.  The US Supreme Court has just refused to hear an application by major banks and companies, including Koch Industries Inc, to prevent Mr Picard, the bankruptcy trustee, from pursuing claims aimed at recouping funds that were transferred overseas.  In the meantime, Mr Madoff has been refused early

A Singaporean Court in Anan Group (Singapore) PTE Ltd v VTB Bank (Public Joint Stock Company) [2020] SGCA 33 has recently confirmed the Court’s approach in assessing arbitration clauses when an application has been brought to put a company into liquidation. 

The parties in this case are parties to an arbitration agreement.  The respondent applied to put the appellant into liquidation.  The Court considered that the winding up proceeding should be stayed with the underlying dispute to be resolved through arbitration.

The English High Court ruled that prospective emergency legislation to amend insolvency laws due to the COVID-19 pandemic could not prevent liquidation proceedings from being brought.  In Shorts Gardens LLP v London Borough of Camden Council [2020] EWHC 1001 (Ch) applications were made by two companies to restrain local councils from bringing liquidation proceedings in respect of unpaid rates and costs orders.

In our April newsletter, we noted that the UK Government had announced proposed changes to insolvency laws.  On 20 May 2020, the Corporate Insolvency and Governance Bill (UK) was introduced.  The proposed reforms include:

The Government has passed an omnibus bill which introduced amendments that will assist New Zealand to respond to the wide-ranging effects of COVID-19.

In brief the changes to insolvency legislation are:

In Re A Company (injunction to restrain presentation of petition) [2020] EWHC 1406 (Ch), the Court held that it is able to take into account the likelihood of a change in the relevant law in deciding whether to restrain a winding up application from being brought.