The economic turbulence stirred up by our most recent credit crunch has thrown up a myriad of difficult legal questions for financiers everywhere. This anxious economic environment which has restrained the financial independence of many Irish companies from their financiers is fraught with legal conundrums.

Workout Agreements

Under the Companies Acts, the liquidator of every insolvent company is obliged to bring a court application to have the insolvent company’s directors restricted from acting as director or secretary of any other company for a period of five years unless that other company has a paid-up share capital of approximately €63,500. The relevant provision of the Companies Acts (Section 150) applies to any person who was a director of the insolvent company either at the date of or within 12 months of the start of the company’s winding-up. Section 150 also applies to shadow directors.

INTRODUCTION

Many practitioners may not think of stamp duty as a particular risk when taking on a liquidation or a receivership and there is limited published guidance on the topic. Against a background of an increasing number of business failures including companies operating in property development it is likely that liquidators and receivers will be faced with stamp duty issues on a more frequent basis. The purpose of this article is to identify some areas where practitioners may encounter stamp duty issues.

PROOF OF TITLE

The first anniversary of the credit crunch passed in recent weeks and the economic turbulence in this country has been reflected in the sharp increase in the number of insolvencies over the past 12 months.

Client Update

The Insolvency and Rehabilitation Law, 2018

On March 5, 2018 the Israeli parliament passed the Insolvency and Rehabilitation Law, 2018 (the "Law"). The Law establishes, for the first time, a modern and consolidated set of insolvency laws for individuals and corporations in Israel. In addition to the codification and consolidation of existing insolvency and rehabilitation rules from multiple sources, the Law makes a number of changes to these existing rules in Israel.

Set out below are some of the key elements of this important new Law.

The Knesset has aimed to update the law on insolvency by passing the Law of Insolvency and Economic Rehabilitation.

This has arisen as a result of the current insolvency laws being considered to be regulated under outdated legislation, being disorganised and having had a detrimental effect on debtors, creditors, and the economy. The incoming Law will take effect in 18 months' time and is designed to rectify the situation and provide the Israeli economy with modern legislation with respect to insolvency.

The Law has three primary objectives:

According to a ruling handed down recently by the Israeli Supreme Court, when a real estate asset is sold before the seller enters bankruptcy proceedings, and the seller has not paid the betterment tax, the local council is not obligated to grant the buyer approval for registering the property under his name. Thus, the buyer will be required to pay the betterment tax.

In March 2018, the Knesset enacted the Insolvency and Economic Rehabilitation Law, 5778 – 2018, which is designed to update the insolvency laws that today apply in Israel.

Until now, insolvency laws were regulated under old-fashioned, outdated, and spotty legislation that was detrimental to the debtors, the creditors, and the entire economy. The law approved in 2018 is designed to rectify this situation and provide the Israeli economy with modern insolvency legislation.

On July 14, 2014 the Tel Aviv District Court rendered its decision with regard to an application filed in the case of Dayan v. Ganden Holdings Ltd., concerning IDB Holdings Corporation Ltd., formerly part of the consortium owned by business tycoon Nochi Dankner ("the Company").

* This article was first published by INSOL International on April 17, 2015.