Introduction

In Arab v Pan, in the matter of Pan (No 3) [2024] FCA 563, the Federal Court of Australia addressed critical issues concerning the scope and compliance of summonses for production in bankruptcy, which will also impact corporate insolvency proceedings and such proceedings in other common law jurisdictions.

Deputy ICC Judge Curl KC’s judgment in Wade & Anor v Singh & Ors [2024] EWHC 1203 (Ch) follows applications by the liquidators of MSD Cash & Carry plc to enforce charging orders over a number of properties owned by the defendants, all of them members of the same family. The main protagonists were Mohinder Singh, Surjit Singh Deol and Raminder Kaur Deol, Mohinder being the father of Surjit, and Raminder, married to Surjit. The estate of a deceased family member was added as a party.

“Subchapter V relieves small business debtors from the absolute priority rule.”[Fn. 1]

• This was the excuse for a contorted grammatical interpretation, against the debtor, of a Subchapter V statute by the Fifth Circuit Court of Appeals.

The Fourth Circuit Court of Appeals gives the same excuse for the same contorted grammatical interpretation — like this:

Creditors want to recover as much money as they can from their debtors as quickly and painlessly as possible. When those debtors take steps to delay, defeat and hinder a creditor’s recovery, creditors can rely on the Fraudulent Preference Act, RSBC 1996, c. 164 (“FPA”) and the Fraudulent Conveyance Act, RSBC 1996, c. 163 (“FCA”) to set aside transactions that have that intention and effect. Generally, the FCA allows “creditors and others” to void dispositions of property designed to delay, hinder or defraud their claims.

International Pte Ltd [2024] SGCA 10 is a landmark case by the Singapore Court of Appeal that sets the test for how Singapore courts should in future approach the question of directors duties when a company is facing financial difficulties. It makes clear that the financial state of the company is an important consideration which a director should bear in mind, as it is the indicia of a shift in the economic interests in the company from the shareholders to the creditors.

Key takeaways

The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 (the "Act") was signed into Irish law on 9 May 2024. The commencement date of the Act has yet to be confirmed. The drafting of the Act was initiated as part of the government's 2021 Action Plan which proposed to enhance the protections afforded to employees and ensure transparency in a collective redundancy situation where the company is insolvent.

Key employment law provisions of the Act

The US appears likely to enter a default cycle in the near future, according to senior fund managers and economists. A recent bout of M&A transactions involving chapter 11 cases point in the same direction. Taking deals involving bankruptcy cases as a proxy for distressed M&A, 16 such transactions were announced in the US in Q1, up 14.3 percent year on year, according to Dealogic. The aggregate value of those deals reached US$1.8 billion, a gain of 76 percent from the same period in 2023.

Corporate governance practices are truly put to the test in two instances: 1) the commencement of litigation; and 2) entry into the zone of insolvency. The latter (distressed circumstances) increases the likelihood of the former (claims against directors and officers).

When distressed circumstances do arise, it is critical to ensure that best practices are in place and adhered to. Often, there may be little time in a crisis to consider and adopt new governance practices given the speed at which events may unfold. Directors need to get it right, and quickly.

"Comity" is a principle of jurisprudence whereby, under appropriate circumstances, one country recognizes within its borders the legislative, executive, or judicial acts of another nation. Many recent court rulings have examined the indispensable role of comity in the context of foreign bankruptcy or insolvency proceedings that have been "recognized" by U.S. courts during the two decades since the enactment of chapter 15 of the Bankruptcy Code. However, U.S.