It has already been five years since the South African legislature introduced business rescue, a corporate restructuring procedure, which given the current economic climate is a concept that most corporates should now be familiar with. Despite its progressive intentions and increasing popularity, business rescue is often abused, usually by directors and stakeholders who have in-depth knowledge of the affairs of the company, the causes and consequences of the financial demise of the company, and who are often the initiators of the process.
On July 1, 2016, the Penalization of Bankruptcy Fraud Amendment Act (the "Act") came into force. The Act aims to combat bankruptcy fraud and stimulate companies to keep proper records at all times.
Obligation to keep company records
A Dutch company's board of managing directors must keep records of the company's financial position and everything related to the company's activities. Additionally, it must keep the company's books, records and other data in such a manner that the company's rights and obligations can be ascertained from them at any time.
BEIS has just published the Government's response to its March 2018 consultation on "Insolvency and Corporate Governance" reforms. The response identifies a number of proposals for reform, as summarised below:
Action to improve the insolvency framework in the cases of major failure
Recent legislative amendments in Ontario are intended to protect construction subcontractors from the claims of other creditors in the event of insolvency. They impose a new requirement to maintain written records for trust funds that will be in effect as of July 1, 2018.
Congress is attempting to pass tax reform legislation and presently the House of Representatives and the Senate have separate proposals under consideration (separately, H.R. 1 and the Senate Plan, respectively, and collectively, “Tax Reform”). The Tax Reform is changing daily, but one thing seems likely and that is that the Tax Reform will change the treatment of net operating losses (“NOLs”). These changes would have the most significant impact to bankruptcy cases filed after December 31, 2017.
Third Circuit holds that State-specific protections in favor of oil and gas producers did not apply under Article 9 of the UCC
Update on Liquidator remuneration post-Sakr1
Key points summary
Following the recent high-profile appeal decision2, the Supreme Court of New South Wales has now finalised the saga that was the review and approval of the remuneration of the Liquidator of Sakr Nominees.
From that decision emerge several key points for insolvency professionals when considering their remuneration:
With the backdrop of INSOL 2017, Asia Today International’s Leon Gettler explores the issues and challenges of insolvency and restructuring in Asia Pacific with special guests: FTI Consulting’s head of Corporate Finance & Restructuring in Asia, John Batchelor; Baker McKenzie’s head of Australian Restructuring & Insolvency, Maria O’Brien; and Senior Legal Counsel for ANZ, Miles Grant.
Please click here to listen to the podcast.
Returns to creditors from litigation against associates of the business are often a lucrative way of getting funds into an administration after a corporate failure. Claims are often made against banks, lawyers and accountants associated with the failure. In some cases, those claims may involve chasing other parties for the proceeds of a fraud. Often these claims provide a greater return than chasing down any remaining assets.
The recent decision in Re Swan Services Pty Limited (in liq)