Many will be familiar with the words “further advances” and associate this term with typical boiler plate provisions in finance documents.
In a recent case (In the matter of Black Ant Co Ltd (in administration) [2014] EWHC 1161 (Ch)(15 April 2014) the High Court provided useful commentary on the meaning of “further advances” in the context of the priority of security.
The legal effect of “limited recourse” arrangements have been thrown into fresh doubt by a first instance decision of the respected Mr Justice David Richards in the case of Arm Asset Backed Securities S.A. [2013] EWHC 3351.
This decision is relevant to the following common financing arrangements.
The Romanian government has adopted, by means of Government emergency ordinance no. 91, the Insolvency Code. The Code gathers and amends all pre-insolvency and insolvency provisions in Romanian legislation relating to companies, groups of companies, credit institutions, insurance and reinsurance companies, as well as cross-border insolvency proceedings. It will enter into force on October 25, 2013 and will also apply to already ongoing insolvency proceedings.
The New Civil Procedure Code (NCPC) came into force on 15 February 2013 and is applicable to all enforcement proceedings that commenced after this date.
The New Civil Procedure Code (NCPC) came into force on 15 February 2013 and is applicable to all enforcement proceedings that commenced after this date.
Creditors may begin forced execution if they have an enforceable title. During such proceedings several incidents may occur, which may result in either the impossibility or the delay to the full protection of the creditor’s rights.
Statute of limitations
The guidelines laid down by the English courts for applying the balance sheet test for insolvency affects not only whether a company is technically insolvent, but also the enforceability of clauses in transactional banking documents and the ability of a liquidator to challenge certain antecedent transactions. The Supreme Court’s decision will therefore be welcomed by advisors, bankers and insolvency practitioners as it has overturned the high threshold laid down by the Court of Appeal.
A discharged Bankrupt had intentionally misled the Court as to his COMI being in England and Wales in order to obtain a Bankruptcy Order. Four years after the making of the Bankruptcy Order, the Court annulled it on the grounds that the Court did not have jurisdiction to make the Order in the first place.
This recent decision on a jurisdictional challenge has provided greater clarity and potentially created a tortious cause of action where a debtor dissipates assets prior to judgment and subsequent freezing order.
Background
Pacific Exploration & Production Corporation ("the Company"), a Canadian public company who explore and produce natural gas and crude oil with operations focused in Latin America. In April 2016, the Company obtained an initial order from the Ontario Superior Court for protection under the Companies' Creditors Arrangement Act for the restructuring of the Company.