The Court of Appeal has delivered the highly anticipated Mainzeal judgment after hearings in July 2020. The Court held that the directors breached both of the two core duties which protect creditors from the risks of insolvent trading, but overturned the controversial measure of damages for reckless trading adopted by the High Court. The High Court is now required to reconsider the quantum of loss but on a "new debt" measure.
Good afternoon.
Following are this week’s summaries of the civil decisions of the Court of Appeal for Ontario.
The Minister of Domestic Trade and Consumer Affairs issued the Prescription of Amount of Indebtedness of Company under Paragraph 466(1)(a) (Gazette Notification No. 4159/2021) stating that the amount of indebtedness for the purposes of section 466(1)(a) of the Companies Act 2016 shall be an amount exceeding RM50,000 with effect from 1 April 2021.
This update deals with the significant appeal judgment released yesterday by the Court of Appeal in the proceedings brought by the liquidators of Mainzeal Property and Construction Ltd (in Liq) (Mainzeal) against its directors. Our previous legal updates on the High Court decisions can be found here and here.
Examinership is a well-established corporate rescue mechanism for ailing corporates and groups. It combines flexibility with a high degree of commercial and procedural certainty for all involved. It is a process which has evolved with the different economic cycles in Ireland since its inception in 1990 and has responded to downturns in different sectors.
Will your business be financially viable at the end of lockdown? What challenges does 2021 pose? What are the next steps
The Court of Appeal has delivered its eagerly anticipated judgment in proceedings brought by the liquidators of Mainzeal Property and Construction Ltd against its former directors, including Richard Yan and Dame Jenny Shipley. In those proceedings, the liquidators sought compensation for breach of certain statutory duties of directors engaged on a company’s insolvency: sections 135 (reckless trading) and 136 (incurring obligations) of the Companies Act 1993.
Introduction
In Krejci, in the matter of Union Standard International Group Pty Ltd,[1] the Federal Court provides an example of the ways in which section 90-15 of the Insolvency Practice Schedule
Following the UK Government extending the restrictions on winding up petitions until 30 June 2021 it is useful to note two recent cases that have considered the coronavirus test that currently applies to winding up petitions.