In July, the Government published its report on The United Nations Commission on International Trade Law (UNCITRAL) introducing two new Model Laws with the aim of improving harmonisation of international trade and insolvency procedures: the Model Law on Enterprise Group Insolvency (MLEG) and the Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLIJ).The Insolvency Service is proposing to adopt the new measures contained in the MLEG and MLIJ as set out below.

The corporate insolvency statistics for Q2 2022 paint a worrying picture for UK businesses. With inflation at a 40-year high, fuelled by soaring gas and electricity bills, food prices and wage increases, the cost of living crisis is taking hold across the economy.

In the short time since we last provided an update regarding the bankruptcy cases of Celsius Networks LLC and its affiliates (here), there have been a number of material developments to report.

Four directors have been disqualified for abusing the dissolution process pursuant to powers introduced by the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 (the Act). In each case, the director secured a bounce back loan on behalf of their company before taking steps to dissolve the company in an attempt to avoid repaying liabilities under the scheme.

There is much to report since our last update on Voyager Digital’s bankruptcy case discussed here.

The government’s monthly insolvency statistics for June 2022 paint a picture of an economy that is still struggling to return to pre-pandemic profitability. Company insolvencies were 40% higher than for the same period last year and 15% higher than in June 2019 (i.e. pre-pandemic levels), with the increased level of insolvencies being largely driven by the higher number of creditors’ voluntary liquidations.

Anyone working in financial services will be aware of the requirement for individuals carrying out regulated roles to be "fit and proper". Clearly this is going to include solid personal finances and demonstrable honesty and integrity. The EAT decided that an estate agent who was dismissed because he became bankrupt and did not tell his employer was fairly dismissed.

On 22 July 2022, judgment was handed down in relation to the sanction of the first Part 26A restructuring plan to be proposed by a small–medium enterprise (SME) in Re Houst Limited [2022] EWHC 1941 (Ch). The restructuring plan (RP) procedure set out in Part 26A of the Companies Act 2006 (CA 2006) has been widely considered to be out of the reach of SMEs due to excessive cost. The decision is also an interesting one for other reasons, notably the cram-down of HMRC as a dissenting creditor.

Now that their bankruptcy filing is a few weeks behind us, we provide below an update on certain matters of interest in the case of Celsius Networks and its affiliates. Of course, it’s still very early in the bankruptcy case — and in cryptocurrency cases in general — but we have already heard from many distressed opportunity investors that are interested in identifying investment opportunities. Given the novel legal and difficult valuation issues involved, it will be important to keep a close eye on the developments in these proceedings.

In a matter of first impression relating to an important bankruptcy claims administration issue, Judge Sean H. Lane of the United States Bankruptcy Court for the Southern District of New York, recently denied the ability of a court appointed claims agent to sell and profit from providing direct access to publicly available claims register information. The unsuccessful purchaser of such information was XClaim Inc. (“Xclaim”), a relatively new venture that is seeking to develop a web-based claims trading platform.