In Huff Energy Fund v. Gershen, C.A. No. 11116-VCS, the Delaware Court of Chancery dismissed a stockholder’s challenge to the board of director’s decision to dissolve the company following an asset sale. The Court ruled that the enhanced scrutiny standards of Revlon and Unocal do not supplant the business judgment rule in the context of a company’s decision to dissolve.

The Third Party (Rights Against Insurers) Act 2010 (the “2010 Act”) finally comes into force on 1 August 2016.

The 2010 Act makes it easier for a third party to bring a claim against an insurer when the insured party has become insolvent. The 2010 Act will replace the Third Parties (Rights Against Insurers) Act 1930 (the “1930 Act”) and is designed to extend and improve the rights of third party claimants.

Policyholders contemplating insurance coverage settlements with low-level insurers should use caution to preserve their ability to access higher-level excess policies. Excess insurers are increasingly disputing that underlying policies are properly exhausted where policyholders elect to settle with underlying insurers for less than full limits. The issue can be further complicated if the policyholder seeks protection under the bankruptcy laws against long-tail liabilities, as a recent case illustrates.

Earlier this year, both the lower and upper houses of Malaysia’s parliament, passed the Companies Bill 2015 (“theBill”) which will harmonise Malaysia's insolvency laws and bring them more in line with modern international standards. Once the Bill comes into effect (it is currently awaiting Royal Assent), it will replace Malaysia’s existing Companies Act 1965.

The recent decision of the Supreme Court of the United Kingdom in Jetivia S.A. and Another v Bilta (UK) Limited (in liquidation) and Ors should make it easier to pursue claims against rogue directors. The Supreme Court held that, in instances where a company has suffered as a result of the unlawful behaviour of its directors, that behaviour cannot be attributed to the company to disallow the company, or its liquidators, from raising claims against directors for breach of their duties.

Background

On 29 April 2015 The Insolvency Service of the UK Government published updated insolvency statistics which include a breakdown of insolvencies that occurred in 2014 across various industry sectors including the construction industry.  There are separate tables of statistics for England and Wales and for Scotland.

The insolvency of Scottish Coal Company Ltd ("SCC") has given rise to two recent Scottish Court of Session cases regarding performance bonds – East Ayrshire Council ("EAC") v Zurich Plc (24 June 2014) and South Lanarkshire Council ("SLC") v Coface SA (27 January 2015). 

The insolvency trade body R3 have issued a useful guide to the insolvency process for creditors.  The guide can be found here.

A frequent criticism is that the insolvency process (and indeed insolvency practitioners) do not do enough to engage with creditors.  Partly this will be because of creditor apathy (who wants to throw good time after bad money?) but partly it is because creditors do not see the insolvency process as being structured to assist them.

The news that USC has taken steps to commence an insolvency process is further proof (if proof were needed) that despite what TS Elliot may have claimed, January really is the cruellest month. 

Background

The ongoing saga of the Scottish Coal Company liquidation provides the background to East Ayrshire Council v Zurich Insurance [2014] CSOH 102.

East Ayrshire Council (EAC) granted planning permission for a surface mine at Dalfad subject to restoration obligations on Scottish Coal. These obligations were secured by a restoration bond granted by Zurich Insurance.  Following Scottish Coal's liquidation, it and its liquidators, were unable to carry out the restoration work.