Payments made by a debtor which disadvantage its creditors may be void and if so must be returned. This applies where the debtor and the recipient of the payment knew that the debtor was unable to pay its debts.
Take a look at our summary below of some of the key R&I trends and developments to look out for in 2024.
On 31 October 2023, the Federal Decree-Law No. 51 of 2023 on Financial Restructuring and Bankruptcy (the Bankruptcy Law) was published in the UAE Gazette. The Bankruptcy Law replaces the Federal Law No. 9 of 2016 on Bankruptcy (as amended) (the 2016 Law).
The aim of the Bankruptcy law is to introduce a modern, streamlined and business-friendly approach to restructuring in the UAE (except for the DIFC and ADGM freezones, which have their own insolvency regimes).
Key Changes
On 23 January 2024, the Court of Appeal overturned the High Court's sanction of Adler Group's (Adler) restructuring plan (the Plan) (see our alert). This much anticipated judgment provides clarity on the court's discretion to sanction a plan where there are dissenting classes of creditors.
Background
The Plan envisaged:
Key points
In a recent landmark case, the Court of Final Appeal in Hong Kong (CFA) clarified its approach to bankruptcy proceedings where the disputed petition debt arises from a contract with an exclusive jurisdiction clause (EJC) favouring a foreign court.
Background
The bankruptcy proceedings related to a disputed debt due under a credit agreement with an EJC favouring New York. The Hong Kong Court of Appeal (CA) upheld the EJC, setting aside the bankruptcy order to allow the dispute to be determined under the agreed jurisdiction. The applicant appealed to the CFA.
In a recent case before the Federal Court of Justice, an insolvency administrator was found to have neglected his duties of investigation in a particularly serious and reproachable manner.
Decision
The insolvency administrator had contested the offsetting of an investment subsidy by the creditor bank to balance the debtor’s accounts.
The focus of the decision was whether the insolvency administrator had made the contestation claim within the statutory limitation period. In Germany, this is usually three years and starts:
The English High Court has re-affirmed its jurisdiction where a disputed petition debt arises from a contract with an exclusive jurisdiction clause (EJC) in favour of a foreign court.
Background
Background
This case involved a winding up petition presented against Bridger & Co Ltd (the Company) on 15 June 2023. The petition debt arises out of a funding agreement between the parties. The Company applied for an injunction to restrain the advertisement of the petition on various grounds. The court declined to make an injunction.
Decision
The judgment helpfully confirms the position on three issues in these types of proceedings:
The October 2023 insolvency statistics show that company insolvencies have risen by 17.6% from October 2022 to October 2023 and by 56.7% since pre-pandemic levels in October 2019. Total insolvencies have reached the highest levels since 2009.