The guidelines laid down by the English courts for applying the balance sheet test for insolvency affects not only whether a company is technically insolvent, but also the enforceability of clauses in transactional banking documents and the ability of a liquidator to challenge certain antecedent transactions. The Supreme Court’s decision will therefore be welcomed by advisors, bankers and insolvency practitioners as it has overturned the high threshold laid down by the Court of Appeal.
CMS has succeeded in its application on behalf of HSBC to overturn the High Court’s decision inRe Tambrook Jersey Limited. The ruling will be welcomed by creditors and practitioners alike as the Court of Appeal has confirmed the UK courts have jurisdiction to grant assistance to a foreign court under the cross-border assistance provisions of section 426 of the Insolvency Act 1986 even where formal insolvency proceedings have not been opened in the foreign jurisdiction.
CMS is advising HSBC on its expedited appeal of a recent controversial decision by the High Court refusing assistance under the cross-border assistance provisions of section 426 of the Insolvency Act 1986. The decision of the Court of Appeal will be of great interest to those involved in cross-border insolvency and restructuring as well as foreign courts.
The New Civil Procedure Code (NCPC) was postponed several times before eventually coming into force on 15 February 2013. The legislators anticipate that the new law will speed up proceedings and offer a greater level of protection to civil rights.
Following last weeks’ report from the Banking Standards Commission in which three former senior executives of HBOS were heavily criticised thoughts have turned to whether or not there is enough evidence for the executives to have disqualification proceedings brought against them. The report named the three executives responsible, and said that the bank, having run up £47bn losses in bad loans, would have gone bust even if the 2008 financial crisis had not happened.
How can a director be disqualified?
Shareholders who fail to intervene to stem the losses in a company they control may be held personally liable for the company’s debts if it is subsequently liquidated, according to the Supreme Court.
Under Hungarian law, a shareholder’s liability (in a limited liability company) is usually limited to their capital contribution. The corporate ‘veil’ can only be pierced (making the shareholder personally liable for the company’s debts) in special circumstances.
A new electronic database of bankruptcy and liquidation petitions, open to any company, is being set up by the National Judicial Office.
This will enable any company to obtain a certificate showing whether it has had a bankruptcy or liquidation petition filed or liquidation proceedings initiated against it (but in each case not yet finally decided).
The introduction of the database and certificate system into the Bankruptcy Code is the result of concerted lobbying by the American Chamber of Commerce in Hungary and CMS Budapest Office.
Share purchase agreements often include indemnities or covenants to pay designed to protect the buyer for a period after completion where some unquantifiable liability is anticipated that will impact on the value of the company being acquired. This is particularly so in the case of unpaid tax.
On 18 January 2013 the Law of Ukraine on Introducing Changes to the Law on Restoring Debtor Solvency or Declaring Bankruptcy (the “New Bankruptcy Law”) became effective. The new Bankruptcy Law introduces a number of important changes to the bankruptcy procedure in Ukraine.
Es war eine immer häufi gere Praxis der Gläubiger, grundlose Insolvenzanträge zu stellen, um einen Konkurrenten vom Konkurrenzkampf zu eliminieren. Auf diese reagiert die Novelle des Insolvenzgesetzes, die am 1. November 2012 in Kraft trat.