Royal Legislative Decree 1/2020, of 5 May, which approves the Recast Spanish Insolvency Law (Texto Refundido de la Ley Concursal, or TRLC) entered into effect on 1 September. As a result, the former Insolvency Law 22/2003, of 9 July, has been derogated almost in its entirety.

According to the TRLC’s Preamble, Spanish insolvency legislation has been amended given the need to reorder, clarify and harmonise the former Insolvency Law and the provisions that have since amended it.

The Australian Federal Government has announced the temporary amendments to insolvency and corporations laws will be extended until 31 December 2020 in light of the continuing challenges of COVID-19.

In brief

1. Introduction 

The highly anticipated Supreme Court decision in Bresco Electrical Services Ltd (in Liquidation) v Michael J Lonsdale [2020] UKSC 25 has endorsed the use of adjudication in the context of insolvency set off, substantially reversing the decision of the Court of Appeal.

The long-running saga between Shandong Chenming Paper Holdings (“Shandong Chenming“) and Arjowiggins HKK2 Ltd (“Arjowiggins“) has continued with the Court of Appeal handing down its judgment on an appeal against a lower court judgment which had dismissed Shandong Chenming’s application to injunct Arjowiggins from presenting a winding-up petition against Shandong Chenming (Shandong Chenming Paper Holdings Limited v. Arjowiggins HKK2 Limited [2020] HKCA 670).

The High Court has expedited a trial at which it would be determined whether luxury car manufacturer McLaren Group could obtain the release of certain security for the benefit of its senior noteholders, failing which a financial restructuring which was contingent on that release could not be implemented: McLaren Holdings Ltd v US Bank Trustees Ltd [2020] EWHC 1892 (Ch). The court concluded that, absent determination of the proceedings within one month, McLaren Group would have no choice but to enter an insolvency process and that this justified expedition in this case.

Singapore’s Insolvency, Restructuring and Dissolution Act (the “IRDA“), together with 48 pieces of subsidiary legislation, comes into force today, 30 July 2020 (available here).

Suppliers are now prevented from terminating many contracts and supplies of goods or services if the customer is subject to a ‘relevant insolvency procedure’ (such as going into administration, CVA, or appointing a provisional liquidator).

This follows the Corporate Insolvency and Governance Act 2020, which came into force on 26 June. Although Coronavirus has accelerated the passing of the Act, these are set to be permanent changes.

What can’t suppliers do?*

The Corporate Insolvency and Governance Act 2020 introduces sweeping insolvency reforms in response to the business impacts of Covid-19, designed “to give companies breathing space and keep trading while they explore options for rescue”. Our UK Restructuring, Turnaround and Insolvency team have published an article in International Corporate Rescue which considers the key elements of the reforms.

DAC Beachcroft's GC Horizon Scanner is a selection of legal and regulatory developments that we consider are the most interesting and relevant to General Counsel, senior managers and professionals, allowing them to keep abreast of issues which are likely to impact their business, prepare for opportunities and mitigate risks.