In several Commonwealth jurisdictions, the corporate legislation allows creditors to petition a court to order the winding up of a debtor in circumstances where that debtor is unable to pay its debts as they fall due. Such legislation generally presumes that the debtor is insolvent if it has failed to comply with a statutory notice requiring the debtor to pay a certain debt within a given period of time (a statutory demand).

Many businesses – from manufacturers ("OEMs") to retailers - are reliant on receiving regular supplies from third parties for their trade. COVID-19 has produced an instant global economic shock that is – inevitably – affecting global supply chains. It is unclear whether the economic effects of COVID-19 will be long or short term, but here are some of the things that businesses which are dependent on their supply chain should be asking themselves.

What is the length of the supply chain and what jurisdictions does it cross?

Preferred maritime liens can raise challenging issues during maritime disputes—especially during bankruptcy. Creditors may encounter problems when filing for seizure due to their unique nature, with venue is becoming a determining factor.

Stefan Ingves has spoken on the Basel Committee’s priorities for the next year. He focused on:

 FSA has set out its standards for “key attributes” of effective resolution regimes. The standards require each jurisdiction to:

The Committee on Payment and Settlement Systems within Basel has published a report looking at how clearing and settlement arrangements for repos work and have worked during the economic crisis. It looks at issues that may affect resilience of repo markets and suggests ideas for strengthening them.

Summary

On 1 July 2009, UNCITRAL adopted the Practice Guide on Cross-Border Insolvency Cooperation. The Practice Guide provides a useful reference source on some practical aspects of cooperation and communication to deal with many of the conflicts and tensions between stakeholders and jurisdictions inevitable in cross-border cases. To ease these tensions, it is often essential for creditors and, importantly, the courts concerned to reach agreement about how the process will be handled.

International context

1 Advantages to aircraft financiers

For an aircraft financier, the virtues of the Cape Town Convention and its Aircraft Equipment Protocol (together Cape Town) are that it aims to:  

ISDA is pleased at how the industry infrastructure for CDS worked in the context of the Lehman default and settlement. It also pointed out the misperceptions about the role of CDS in the financial crisis.

High Court orders the liquidation of CBL Insurance