Background
The Times revealed in an article last month that, according to a report from the Audit Reform Lab, a think tank at the University of Sheffield, only a quarter of the 250 largest companies listed on the London Stock Exchange to become insolvent between 2010 and 2022 had a “going concern” warning included by their auditors in what would turn out to be their final set of accounts. Of those companies 38 also declared a dividend in those accounts.
Since the implementation of the Insolvency, Restructuring and Dissolution Act 2018 (the IRDA), liquidators and judicial managers in Singapore have been statutorily authorised to use third-party funding for a range of claw-back actions. They are also able to transfer company assets to funders; to assign the fruits of legal actions to funders; and to grant super-priority to funders.
By a notification dated 14 June 2023 (read here), the Ministry of Corporate Affairs has exempted petroleum assets leased by a company undergoing insolvency proceedings from the moratorium provisions of the Insolvency and Bankruptcy Code, 2016.
The Ministry of Corporate Affairs by notification dated 03 October 2023 (read here) exempted transactions, arrangements or agreements relating to aircraft, aircraft engines, airframes and helicopters under the Cape Town Convention and Protocol from the moratorium provisions of the Insolvency and Bankruptcy Code, 2016.
Is a court order necessary for security interests granted after the appointment of external administrators? Perhaps not.
On 18 September 2023, the Insolvency and Bankruptcy Board of India (IBBI) introduced the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (CIRP Amendment Regulations). Here is a summary of the key changes made through these regulations:
Introduction
Introduction
The Insolvency and Bankruptcy Code (Code) provides the right to a financial creditor to make an application to the National Company Law Tribunal (NCLT) for initiation of corporate insolvency resolution process (CIRP) against a corporate debtor in the event the debtor fails to repay its debt owed to the creditor. The Code as well as precedents developed by insolvency courts have consistently held that the test for admission of an insolvency application of a financial creditor is twofold, existence of a debt and default on that debt.