Press reports are crowded with headlines about the rise in commercial bankruptcy filings, which increased yet again this year.1 High interest rates, inflation, delayed effects of COVID, and huge corporate debt contributed to the jump in corporate insolvency filings. More are anticipated.
Judgment and award creditors often fret that US courts are unfriendly and the tools to unravel complicated asset protection schemes are inadequate. In an encouraging ruling refuting this sentiment, the Southern District of New York recently reiterated its endorsement for reverse veil piercing as a remedy for unsatisfied judgment creditors seeking to hold corporate entities responsible for judgment liabilities of shareholders and directors.
One of the significant risks that creditors weigh when deciding whether to lend money is bankruptcy risk: can the borrower use the bankruptcy laws to discharge the debt or compel the creditor to accept less than it bargained for? In the sovereign debt market, it has been an article of faith for creditors that states cannot file for bankruptcy and obtain such relief. But a recent ruling from the U.S. District Court for the Southern District of New York—Hamilton Reserve Bank v.
What matters
This article delves into some key considerations for suppliers when dealing with customers where there may be a risk of non-payment or insolvency circumstances and how a supplier can minimise the risk to their cash flow and business.
What matters next
What matters
This article delves into some key considerations for suppliers when dealing with customers where there may be a risk of non-payment or insolvency circumstances and how a supplier can minimise the risk to their cash flow and business.
What matters next
When does the directors' duty arise to consider creditors' interests in the face of insolvency if a liability is disputed? Hayley Capani and Kate Garcia consider the case of Hunt v Singh and conclude we still don't have all the answers.
The recent sanction judgment gives important guidance on the way in which the court's discretion should be exercised when sanctioning a restructuring plan and considers whether it is necessary for opposing parties to provide valuation evidence of their own .
Key takeaways from the judgment
No worse off test: expert evidence
In its recent judgement in Re Avanti Communications Ltd [2023] EWHC 940 (Ch) ('Avanti') the High Court decided that in some circumstances a charge can take effect as a fixed charge despite the chargor having some flexibility to dispose of assets without the consent of the charge holder.
Background
As of 17 April 2023 new creditors winding up petitions can be presented in accordance with the Insolvency (Amendment) Rules (NI) 2023. This means that the restrictions faced by creditors in filing winding up petitions will be lifted, and ultimately more companies will be open to pursual.
The Supreme Court handed down its judgment on the case of Rakusen v Jepsen on 1 March 2023, deciding that rent repayment orders cannot be made against superior landlords.
The case considered whether rent repayment orders (RROs) under the Housing and Planning Act 2016, could be made against immediate landlords only, or whether superior landlords are also liable.