This note considers how the recent changes to UK insolvency law introduced by the Corporate Insolvency and Governance Act 2020 ("CIGA") might affect those involved in the sale and purchase of commodities. In particular, it looks at the impact of Section 14 of CIGA on contracts for the supply of goods or services, and on the typical rights and remedies of the seller / supplier under such contracts.
In the latest edition of Going concerns, Stephenson Harwood's Asia restructuring and insolvency team touch on key changes in Singapore brought about by the recent Singapore Insolvency, Restructuring and Dissolution Act 2018 (and where applicable, the impact on the shipping industry), and the positions in Singapore and Hong Kong on winding up petitions vs arbitration clauses.
Content
Get to know the Insolvency, Restructuring and Dissolution Act 2018 ("IRDA") Winding up petitions vs arbitration clauses (SG) The prima facie standard of review prevails
Cory Bebb looks at a recent unsuccessful attempt by Administrators to block an £18.6M misfeasance claim by contributories.
“All cats are animals, but all animals are not cats” - former administrators’ attempt to stop £18.6M misfeasance claim based upon their CVA release clause, fails in a provisional ruling: Re Rhino Enterprise Properties Limited [2020] EWHC 2370 (Ch)
Background
The Finance Act 2020 received Royal Assent on 22 July 2020 and will restore HMRC as a preferential creditor on insolvency (Crown Preference) with effect from 1 December 2020.
There had been speculation that the Government would shelve or at least postpone the reintroduction of Crown Preference in the wake of Covid-19. In fact, even before the pandemic, the proposals had been widely criticised by the restructuring and insolvency industry as harmful to the UK’s corporate rescue culture.
The case of Re Lehman Brothers Europe Ltd (In Administration)[2020] EWHC 1369 (Ch) in May 2020 highlighted the importance of ensuring that creditors or the creditors committee approve the discharge of Administrators’ liability pursuant to paragraph 98 of Schedule B1 to the Insolvency Act 1986.
Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited CACV 158/2017 (date of judgment 5 August 2020)1
Introduction
publication of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020. If approved by Parliament the scheme will come into force on 4 May 2021.
Having successfully obtained a public interest winding-up order in Re PAG Management Services Limited [2015] BCC 720 which operated a business rates avoidance scheme using Members’ Voluntary Liquidations, the Secretary of State for Business, Energy and Industrial Strategy unsuccessfully tackled its successor in the Court of Appeal.
The scheme in this case (Scheme 3) was a variant upon two earlier schemes, Scheme 2 being no longer in operation following the public interest winding-up of PAG Management Services Limited.
What does the Corporate Insolvency and Governance Act 2020 (CIGA) do?
CIGA introduces various changes to various provisions of the Insolvency Act 1986 and the Companies Act 2006.
Some of these changes are designed to be permanent changes to the insolvency landscape (largely implementing proposals for insolvency law reform introduced in 2018) – for example, the introduction of a moratorium, a ban on termination provisions (also known as ipso facto clauses) and a new pre-insolvency rescue and restructuring regime.