Since the introduction of The Companies Act 2014, directors have relied on the Summary Approval Procedure as a means of sanctioning certain activities that are otherwise prohibited.
While it has been a welcome development in simplifying financial transactions, directors need to be mindful of the appropriate steps to be taken so they are not leaving themselves open to committing an offence or being personally liable for the debts of a company.
Background
Kai Zeng and Kon M Asimacopoulos, Kirkland & Ellis
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
The purpose and role of ad hoc committees from a debtor’s perspective: the initial phase
Yushan Ng and Helen Ward, Cadwalader Wickersham & Taft
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Chris Howard, Sullivan & Cromwell
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
The relationship of an ad hoc committee with its stakeholder constituency
No power to bind: the importance of the underlying finance documents in relation to decision making
Nick Angel, Peter Newman and Edward Rasp, Milbank LLP
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Role and powers
Yen Sum and Lucy Cox, Sidley Austin
This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
How many committees?
In a capital structure involving multiple external debt tranches, one of the first questions that arises is the number of committees that will be required.
The High Court has refused a challenge by a liquidator to an invoice discounting agreement entered into by the Company prior to liquidation.
The liquidator argued that the invoice discounting agreement was in fact a loan agreement under which the Bank took a charge over the Company’s book debts. If that was the case, then those funds would be funds in the liquidation and the Bank an unsecured creditor, because the loan agreement was not registered and therefore void as against the liquidator.
The High Court recently rejected an appeal by KBC Bank Ireland (“KBC”) to write down a portion of a debtor couple’s mortgage due to the uncertainty in the ability of the debtors to repay the warehousing portion of the loan. The Personal Insolvency Arrangement (“PIA”) which had been approved by the Circuit Court was upheld.
A recent High Court case has brought about a change in the status quo involving personal insolvency arrangements and separated spouses. Banks were previously unable to complete deals with one spouse without the mutual cooperation of both parties. However the decision of JD & Personal Insolvency Acts1 has altered this position.