As the prospects for business survival become ever tougher due to challenging economic conditions, administrators and liquidators are increasingly finding themselves having to justify to the courts whether or not costs should be treated as an expense of the administration or liquidation.

Sums incurred or paid as an expense of an administration or liquidation are, unlike debts incurred before the appointment of the administrator or liquidator, paid in preference to unsecured debts and also before the administrator or liquidator's fees and expenses.

There have been a number of first instance decisions concerning the construction and effect of Section 2 (a) (iii) of the ISDA Master Agreement. The problem has been the conflicts between the various judgments, and in particular, with respect to the interpretation and effect of Section 2 (a) (iii). This has led to uncertainly as to how the Section is intended to operate.

Today, the Financial Services Authority (FSA) published Final Notices for Christchurch Investment Management Limited (Christchurch) and the firm's compliance officer, David Thornberry, for breaches of the FSA's client money rules (CASS rules).

The Belgian Constitutional Court declared netting arrangements in insolvency proceedings, which are explicitly allowed under the Belgian Financial Collateral Law of 15 December 2004, unconstitutional where such netting arrangements apply to non-merchants. Despite the numerous criticisms on this decision, a legislative proposal was drafted on 13 September 2011 in order to explicitly exclude non-merchants from the application of the Belgian Financial Collateral Law.

On 22 September 2011, the Parliament of Ukraine adopted the Law of Ukraine No. 3795-VI “On Amendments to Several Legislative Acts of Ukraine regarding the Regulation of Legal Relations between Creditors and Receivers of Financial Services” (the “Law”). The Law, among other changes, introduced amendments to the Law of Ukraine “On Restoring Debtor’s Solvency or Recognising it Bankrupt”, No. 2343-XII, dated 14 May 1992, as amended (the “Bankruptcy Law”).

On 22 September 2011, the Parliament of Ukraine adopted Law of Ukraine No. 3795-VI “On Amendments to Several Legislative Acts of Ukraine regarding Regulation of Legal Relations between Creditors and Receivers of Financial Services” (the “Law”). The Law became effective on 16 October 2011. Although the positive impact of certain amendments is rather ambiguous at this stage, the Law is likely to reduce risks in the financial system.

The major amendments envisaged by the Law cover the following key areas:

Loans and security

Every business must manage risk. Whenever such risk turns into reality, the consequences must be accepted and declared for the well being of the wider economic environment. The purpose of this article is to analyse the legal framework of the commencement of insolvency proceedings at a debtor’s request and the sanctions applicable when such a framework is surpassed.

The collection of the insolvency estate is one of the important phases of insolvency proceedings. The Bulgarian Commerce Act (Issue No. 48 dated 18 June 1991, as amended) (the “Act”) provides certain tools to facilitate the collection of funds and other assets in order to “maximise” the insolvency estate. One such tool is the ability of the insolvency administrator, or the creditors to the insolvency estate, to challenge the validity of acts and transactions performed by the insolvent company after the insolvency trigger date.

Following last edition’s article on the insolvency proceedings of the market-leading Czech betting company, we would like to provide an update on the progress of the company’s insolvency proceedings.

On August 26, 2011 the Italian Supreme Court issued the decision no. 32899 stating that shareholders of a company will commit an offence if they unreasonably provide funds to a company in distress, rather than proceeding with the immediate liquidation of the company.