Industry insights 

Following two significant insolvency decisions in the High Court of Australia (Bryant v Badenoch Integrated Logging Pty Ltd and Metal Manufactures Pty Limited v Morton), insolvency professionals and creditors have had to reassess the value and requirements of proof   in unfair preference claim recoveries.

Snippet series

What is the impact on the double Luxco and the Luxembourg share pledges?

Luxembourg bolsters its position for the structurings of international investments with the introduction of new tools for bankruptcy prevention. The existing and new financial collateral arrangements maintain their bankruptcy insolvency proceedings remote status, preserving the benefit and popularity of the double Luxco structure and the related enforcement of Luxembourg share security.

Bouwen met vertrouwen: insolventie-gerelateerde aandachtspunten voor opdrachtgevers in bouwcontracten

The current market conditions of the construction and project development sector may prompt extra attention to insolvency-related safeguards in building contracts with (sub)contractors. Aiming to mitigate insolvency risks as much as possible, in this blog we discuss a few key considerations for principals to take into account when entering into building contracts with (sub)contractors.

Building with confidence: insolvency-related considerations for principals in building contracts

For a foreign decree to be recognisable in Switzerland, it is according to the Swiss International Private Law Act, required that the foreign bankruptcy decree is enforceable in the state where it was issued, and there must not be any grounds for refusing recognition, e.g. a violation of Swiss public policy. Furthermore, the decision must have been issued either in the state where the debtor has its seat or domicile or in the state where the debtor has its centre of main interests.

The long-awaited new Luxembourg law on business preservation and modernisation of bankruptcy law voted by the Luxembourg Parliament on 19 July 2023 (the Law) implementing EU Directive 2019/1023 of 20 June 2019 contains a range of new preventive reorganisation procedures, notably (i) conservatory measures (appointment of a conciliator), (ii) an out-of-court reorganization procedure by mutual agreement (réorganisation par accord amiable) and (iii) judicial reorganisation proceedings (JRP).

If bankruptcy proceedings are commenced against a debtor or if a debtor enters into a court-approved composition agreement with an assignment of all of its assets, transactions executed by the debtor during the last five years are subject to scrutiny.

The purpose of claw back claims is to recover assets extracted from or given away by an insolvent debtor for the benefit of its insolvency estate and ultimately its creditors. Transactions may be subject to claw back actions if:

European leveraged finance transactions (i.e., acquisition financing by fund sponsors of European targets) are often structured through Luxembourg or the Netherlands because those are creditor-friendly jurisdictions for the creation, perfection and enforcement of (certain) security interests. Structuring through Luxembourg or the Netherlands provides a high degree of transaction flexibility compared to other jurisdictions.

The Hong Kong High Court has found that cryptocurrencies are property in a landmark case, further boosting the city’s virtual asset industry and its ambition to become the Asian crypto hub.

The first High Court decisions in 2023; Metal Manufactures Pty Limited v Morton Metal Manufactures Pty Limited v Morton [2023] HCA 1 (‘Metal Manufactures’) and Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2 (‘Bryant’) have provided the final word on preference claims, establishing once and for all that:

1. set-off under s 553C of the Corporations Act 2001 (Cth) (‘the Act’) does not apply to unfair transactions; and

2. the peak indebtedness rule does not apply.