Written by Côme de Girval, Capstan Avocats
If an employer finds itself in financial difficulties that involve liquidation or restructuring, employee entitlements could be at risk. Compulsory insurance schemes in some jurisdictions can provide employees with important guarantees.
The law regarding moratoriums imposed under Section 14 of the Insolvency and Bankruptcy Code[1] (hereinafter referred to as the IBC 2016) has been often explained and clarified by various judicial pronouncements, which aptly interpret the multitudes contained in Section 14 of the IBC.
Over recent years, a prolonged period of low interest rates, together with a competitive financing market, has resulted in greater leverage and control for private companies (and their sponsors) when it comes to negotiating terms with current and potential creditors. There has also been, as a consequence of this dynamic and the general availability of capital, an expansion in debt document flexibility over the course of the last decade.
In a recent judgment passed by the National Company Law Appellate Tribunal (NCLAT), in the case of Somesh Choudhary v Knight Riders Sports Private Limited & Anr1, it was held that claims arising out of Intellectual Property Rights would come within the ambit of Section 5 (21) of the Insolvency and Bankruptcy Code, 2016
Close economic ties and interdependence between the US and Canada have been bolstered by free trade policies and intensified global competition, paving the way for continued opportunities for US businesses to tap into the Canadian market. These opportunities have resulted in an active cross-border lending market. In light of this, US lenders who are lending into Canada may encounter, and should be aware of, Canadian-specific legal issues and considerations.
The English High Court has sanctioned a restructuring plan in respect of EUR 3.2 billion of bonds issued by the German real estate business, Adler Group. The main objective of the plan was to avoid Adler's imminent insolvency by facilitating access to EUR 937.5 million of new money funding and thereby providing a stable platform from which Adler Group can pursue a solvent wind-down by asset sales over time in recovered market conditions. This represents a novel use of the restructuring plan procedure, which has previously been seen exclusively as a corporate 'rescue' tool.
With increased stress in global, domestic, and regional economies, the number of Australian businesses at risk of bankruptcy is approaching a three-year high.
COMPETITION LAW
The Insolvency and Bankruptcy Code (Code) provides the right to a financial creditor to make an application to the National Company Law Tribunal (NCLT) for initiation of corporate insolvency resolution process (CIRP) against a corporate debtor in the event the debtor fails to repay its debt owed to the creditor. The Code as well as precedents developed by insolvency courts have consistently held that the test for admission of an insolvency application of a financial creditor is twofold, existence of a debt and default on that debt.
Stamp duty implications are required to be assessed carefully for restructuring plan involving merger, demerger or slump sale. Even if the court/tribunal approved restructuring schemes are tax neutral, it may not necessarily avoid the stamp duty implications.