The issue

A "no action" clause will appear in almost all English law-governed bond trust deeds.

A no action clause provides that a bondholder (or anyone entitled to payments on the bonds) cannot, initially, proceed directly against the issuer. Instead, the right to bring a cause of action resides with the trustee and it is only if the trustee, having become bound to take action, fails to do so within a reasonable time (with the failure continuing) that a bondholder can then itself proceed directly against the issuer.

This week's TGIF considers Stubbings v Jams 2 Pty Ltd [2022] HCA 6, in which the High Court overturned a finding by the Victorian Court of Appeal and confirmed that certificates of independent advice will not always protect lenders from an unconscionability claim.

In a recent case involving a default judgment to recover the sum of an outstanding loan, the Federal Court of Australia considered whether it had jurisdiction to set aside a bankruptcy notice issued against the guarantor of the loan and whether it had jurisdiction to extend the time for compliance with the bankruptcy notice.

Background

There are significant differences in the procedures available to lenders north and south of the border when it comes to enforcing fixed charges or standard securities over real/heritable property. In this blog, we will compare the process in England & Wales ("E&W") of appointing a fixed charge or "LPA" receiver with the Scottish calling-up procedure

England & Wales: LPA receivers

Supreme Court 22 January 2022, ECLI:NL:HR:2020:80 - www.rechtspraak.nl

Introduction

Recently, the Supreme Court dealt with the following question: can the bankruptcy trustee recover a payment made from a bank account with a debit balance in the name of the bankrupt company after the bankruptcy date, as undue payment due to a breach of the fixation principle or the equality of creditors principle?

Hoge Raad 22 januari 2022, ECLI:NL:HR:2022:80 (www.rechtspraak.nl).

Introductie

In het onderhavige arrest buigt de Hoge Raad zich over de volgende vraag: kan de curator een girale betaling, gedaan na datum faillissement vanaf een op naam van de failliet staande bankrekening met een debetsaldo, als onverschuldigd terugvorderen wegens strijdigheid met het fixatiebeginsel of de paritas creditorum?

The Commercial Court (Andrew Baker J) has handed down judgment on a jurisdiction challenge inInvest Bank v El-Husseini[2022] EWHC 894 (Comm). Daniel Warents (whose oral submission to the Court were said to have been “very well presented”) and Emma Hughes acted for the first, third, and fourth defendants (instructed by Streathers Solicitors LLP).

Government-backed loan schemes implemented to assist ailing businesses during the pandemic have been subject to widespread abuse. An estimated £4.9bn of the £47bn invested in business support loans during the life of the pandemic is thought have been lost to fraud and up to £17bn may never be repaid. In response to concerns about potential abuse of limited company liability, new legislation received Royal Assent on 15 December 2021 - The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 (the Act).

Military aggression of the russian federation against Ukraine has significantly influenced operation of various businesses in Ukraine. Some of them are put on hold because of danger for employees and disruption of supply chains; some factories are physically damaged and cannot continue their production in full or in part. As a result, a lot of Ukrainian enterprises may fail to fulfill their contractual obligations, including repayment of debts to national and foreign financial institutions.

Debtors and investors have an enhanced choice of restructuring venues as the EU Restructuring Directive is rolled out in Member States