Judgment of the Court of Appeal of Porto of 05-12-2013

Contract Termination in Favor of the Insolvency Assets – Conditional Termination – Requirements – Bad Faith – Judicial Presumption

The context - validity of appointment of administrators

The appointment of administrators under a charge prevents a company’s directors from exercising any management powers without the administrator’s consent.
However, the charge must be enforceable at the time of the administrators’ appointment. What happens if the directors dispute that the charge was enforceable? Are they prevented from controlling the company to reject the appointment.

The background

IPs are always on guard for potential conversion claims - but what happens when no title can be established? Euromex clarifies the whole mess.

The background

Whenever there is an apparent monetary debt, common practice is for a claimant to threaten a winding up petition as part of the tactics to get a potential defendant to pay up. Three weeks after a statutory demand letter is sent where an apparent debt for £750 or more exists, a winding up petition can be issued against a company which has not paid (the actual financial wellbeing of the payer is irrelevant as long as they have not paid). Whenever an apparent debt is in dispute this can be a powerful tool to unsettle a defendant.

Following insolvency, creditors and the (now insolvent) company can claim back losses from directors who breached their duties prior to the business breaking down. But it is not just formal directors – it is any individuals who actually control the company and have made themselves ‘shadow directors’ by doing so. In this way, creditors can recoup funds to meet the company’s debts from the individual directors who caused the loss of such funds.

The High Court has confirmed that all rights relating to the control of data belonging to, or being controlled by, a company at the time it entered into liquidation remain vested in the company at and following its liquidation. Liquidators are therefore not personally liable for compliance with the Data Protection Act 1998 in respect of this data as they will be viewed as agents acting for the company rather than as 'data controllers'.

Act 14/2013, of September 27, 2013, favoring entrepreneurs and their internationalization (the “Act”), introduces a wide range of reforms on insolvency, corporate, tax and labor matters. Regarding insolvencies, it takes a more flexible approach to the quorum of financial creditors required for court-sanctioned refinancing agreements and it regulates out-of-court agree-ments for payment as mechanisms for out-of-court negotiation with creditors.

REFINANCING AGREEMENTS

The recent decision of Re Bluecrest Mercantile BV saw the High Court stay proceedings for summary judgment in respect of contract debts to allow the formulation of proposals for a scheme of arrangement - is this likely to be become common practice, or is it a one-off?

The background

The past quarter has seen a spate of cases on range of administration issues. Here we take a canter through some of the more topical ones.

High Court allows appeal on rent as an expense of the administration

I ARTICLE 233(5) OF THE CODE OF INSOLVENCY AND RECOVERY OF COMPANIES