Summary
The much anticipated judgement of Mr Justice Snowden in relation to a restructuring plan proposal (the “Plans”) made by Virgin Active Holdings Limited, Virgin Active Limited and Virgin Active Health Clubs Limited (the “Plan Companies”) was handed down on 12 May 2021.
In the recent case of TMG Brokers Ltd (In Liquidation) (also known as: Baker v Staines) the High Court held a director of a company to be jointly and severally liable for payments made by his co-director out of the company’s bank account which were made without proper authority and amounted to disguised distributions of capital. The fact that he had placed trust in the other director for the company's financial affairs did not excuse him from performing his duties.
Background
NEWSLETTER A WORD OF COUNSEL 1st Edition 2021 (12th Issue) ww.dvc.hk IN THIS ISSUE Who was appointed to act as a provisional liquidator for UA Cinemas? PAGE 54 Who from DVC appeared in this year's inaugural edition of the Legal 500 (2020-2021) Hong Kong Edition? PAGE 56 What are the limits to the Irregularity Principle and what remedies are available to an aggrieved Director? PAGE 33 Why is reform needed in HK's mental health arena?
Christopher Buckingham acted for the Secretary of State in Re Javazzi Limited (in liquidation) [2021] EWHC 1239 (Ch).
In what is likely to be the most significant change to the UK restructuring and insolvency market since the Enterprise Act 2002, the Court has yesterday1 paved the way for restructuring plans under Part 26A to the Companies Act 2006 ("RPs") to be used to compromise the rights of landlords, financial creditors and other unsecured creditors provided the company shows that those creditors are "out of the money". There may even be no need to ask those compromised creditors to vote on the RP.
introduction
A further element of the announcement made on 3 May 2021 by the Treasurer and Assistant Treasurer of Australia was in relation to the possible reform of the law relating to the “safe harbour” for Directors, protecting them from liability for insolvent trading. The announcement foreshadowed a “review whether the insolvent trading safe harbour provisions, which were introduced in 2017 and designed to promote a culture of entrepreneurship and innovation by providing breathing space for distressed businesses, remain fit for purpose.”
2017 safe harbour provisions
We summarise the background and outcomes of Case C-73/20 – Oeltrans, an important ruling for liquidators faced with the avoidance of a third party payment and a conflict of laws.
The facts
We are hopefully now beginning to move out of the various lockdowns and restrictions that have been put in place to deal with the pandemic.
As things begin to return to some form of "normality", businesses might begin to feel some sort of relief. However, the inevitable consequence of normality returning is that some of the temporary rules that have been put in place to assist businesses through these difficulties will fall away.
On March 31, 2021, the United States Bankruptcy Court for the District of Nevada awarded attorney’s fees to a debtor under a Nevada fee-shifting statute for objecting to a time-barred proof of claim.1 The opinion serves as a warning that filing a proof of claim for time-barred debt may carry consequences other than claim disallowance despite the Supreme Court’s recent holding in Midland Fu
On 3 May 2021, the Treasurer announced that the Morrison government is pursuing further measures to improve Australia’s insolvency framework for both small and large businesses.
As part of the 2020–21 budget, the government announced the most significant reforms to Australia’s insolvency framework in 30 years. These reforms, which commenced on 1 January 2021, created new simplified liquidation and debt restructuring processes for small companies, and has provided directors with the control and flexibility they need to either restructure their business or wind down operations.