In two recent judgments, the Hong Kong companies court has set out the principles applicable to winding up companies holding operating subsidiaries in the mainland through intermediate subsidiaries incorporated offshore, most commonly in the BVI. In doing so, the Honourable Mr. Justice Harris highlighted the need for the petitioner to demonstrate a "real and discernible benefit" to creditors, something which will be challenging to prove if the company’s centre of main interests is not in Hong Kong.
Il D.L. 24 agosto 2021 n. 118 (Decreto Crisi d’Impresa) è ora legge: il 23 ottobre 2021 è stata pubblicata in Gazzetta Ufficiale la L. 147/2021 di conversione del D.L.
The conversion into statute on 23 October 2021 of the so-called Business Distress Bill adds new provisions to those recently adopted by the Italian government to address corporate distress following the COVID-19 pandemic, to provide companies with new legal tools to prevent the onset of economic distress or overcome reversible financial instability.
On Wednesday, November 3, the House Judiciary Committee approved legislation on a party-line vote that could drastically reshape chapter 11 restructurings, particularly in cases involving significant tort liability. The bill, the Nondebtor Release Prohibition Act of 2021 (the “NRPA”) is sponsored by Judiciary Chairman Jerry Nadler (D-NY), Oversight Chairman Rep. Carolyn Maloney (D-NY), and Rep. David Cicilline (D-RI), who chairs the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law, which has jurisdiction over bankruptcy law-related issues.
The Supreme Court of New South Wales has recently handed down its decision in proceedings (“Arrium Proceedings”) brought by a number of lenders against former officers and employees of Arrium Limited and its subsidiaries (“Arrium”).
Introduction
Justice Ball’s landmark decision1 dismissing the lenders’ claims addressed various important issues that often arise when a borrower is facing financial distress in Australia, including:
The High Court has dismissed an application by a landlord creditor to overturn a company voluntary arrangement (CVA) implemented by coffee shop chain Caffé Nero. The CVA, previously approved by its creditors, compromised rent arrears and reduced future rents for the company's premises. The decision follows a series of previous high-profile challenges to retail and leisure CVAs.
In this article we look at current trends and developments at the intersection between insolvency and dispute resolution, including a rundown of some of the latest legislative changes, and issues to consider when litigating against parties in financial distress.
This analysis was first published on Lexis®PSL on 27 September 2021 and is republished with their kind permission.
Corporate Insolvency and Governance Act 2020
The UK Government yesterday announced that it will proceed with the phasing out of temporary measures introduced to protect businesses from creditor action during the COVID-19 pandemic, whilst also announcing new measures to protect smaller businesses from winding up petitions. The legislation required to implement these amendments was laid before Parliament yesterday and will come into force on 29 September 2021.
The Pensions Regulator's new powers: what lenders need to know Updated August 2021 Pension briefing Following the insolvencies of Carillion and BHS and the associated fallout for the pension schemes they sponsored, the Pensions Regulator (tPR) announced it was going to be “clearer, quicker and tougher”. The Pension Schemes Act 2021 (the Act) gives tPR significant new powers to intervene where the security of defined benefit (DB) pensions may be at risk.
Section 365 of the Bankruptcy Code creates a framework through which a debtor can elect to either assume or reject an executory contract. Because the Bankruptcy Code does not define “executory,” courts utilize various tests to determine if a debtor can assume a contract—and thus be obligated to perform—or reject a contract—and thus the contract is deemed breached immediately prior to the bankruptcy filing date. The Countryman test is overwhelmingly the most commonly applied test to determine a contract’s executory nature.