Reports last week of the significant increase in corporate insolvencies and voluntary liquidations in England and Wales for Q2 demonstrate the combined impact of government COVID-19 support being withdrawn, soaring energy and fuel costs, and weakening demand – and are being reflected in the nature of the instructions coming into our global jurisdictions from distressed companies across the globe.
The illegality defence (which aims to prevent a party benefiting from its illegal conduct via legal claims) has been the subject of considerable judicial analysis in commonwealth jurisdictions in recent years.
In relation to a secured party enforcing its rights under a mortgage or charge of shares in a BVI company, the secured party will typically exercise its rights under BVI law to sell the shares or to appoint a receiver in respect of them. Such rights may generally only be exercised after a default has occurred and has continued (without rectification for 14 days following notice of the default) for a period of at least 30 days. These time periods can be shortened by contractual agreement in the relevant security document.
The global M&A market has remained strong from the end of 2017 into 2018, with the total deals announced in the first half of 2018 making it the best period for global M&A yet. With stockholders pressuring larger companies to grow their revenues and the strong liquidity position of many companies, it is a sellers’ market.
Globalisation has been described as an evolving set of consequences – some good, some bad and some unintended. In this regard, when companies go global, insolvency is perhaps the furthest thing from their minds. Yet, while business failure may be unintended, when a global company becomes insolvent or attempts debt restructuring, its insolvency representative e.g. liquidator or manager, will often have to deal with assets and creditors across the globe.
Forum bias, along with some technical issues, are still challenges in cross-border insolvencies in Australia
Just over ten years ago, Lehman Brothers filed for bankruptcy in the US, which turned out to be one of the largest cross-border insolvency cases in history.
Last year also marks:
With the enactment of the ipso factoreform in September this year (which commences operation on 1 July 2018), it is the genuine hope of many insolvency practitioners and others in the market that voluntary administration will become a less value-destructive and, therefore, a more useful tool for company restructures.
Legislation seeks to balance debtor and creditor needs and help businesses and investors operate with confidence in the Middle East.
On 11 June 2019, the Dubai International Financial Centre (DIFC) introduced a new insolvency law (DIFC Insolvency Law No. 1 of 2019 and associated DIFC Insolvency Regulations 2019), which became effective on 13 June.
Restructuring companies in respect of which there exists a significant credit default swaps (CDS) market adds an additional level of complexity which the debtor and all stakeholders should consider and assess early on in the process, as it could determine the success or failure of a restructuring plan.
Judicial comments cast doubt on the ability to compromise US law-governed debt effectively based on Chapter 15 recognition alone.