Given the current financial climate you may wonder what options are open to you or your organisation when you are owed money by a third party. There can often be an assumption that lengthy court processes are required to recover sums due. That is not the case and in this article we consider some of the options available to help recover debts in Scotland.
Pre-Court Action
Statutory Demand
As the economy continues to face challenges and the threat of bankruptcy becomes more prevalent among businesses, landlords must be more vigilant in protecting their interests in commercial leases. One area of particular concern is leases that fall under Section 467 of the Internal Revenue Code (“Section 467 Leases”).
With the recent flurry of reverse vesting orders (RVOs) in Canadian insolvency proceedings in the last two years, courts have warned against over-use of this distressed M&A structure. In PaySlate Inc. (Re), 2023 BCSC 608, the Supreme Court of British Columbia hit reverse.
Introduction:
Liquidation is the process of winding up a company’s financial affairs. The assets of the company are collected and realised, the resulting funds are applied to discharging the company’s liabilities and debts, and any residual funds are redistributed to the company’s members. Liquidation is the only way to fully wind up the affairs of a company and end the existence of the company.
The chief purposes of liquidation are threefold:
In a departure from prior precedent in the United States Bankruptcy Court for the Southern District of New York (SDNY), a recent opinion by Judge Michael E. Wiles in In re Cortlandt Liquidating LLC,[1] effectively lowered the Bankruptcy Code section 502(b)(6) cap on rejection damages that a commercial real estate landlord may claim, by holding that the cap should be calculated using the “Time Approach,” rather than the “Rent Approach.”
Calculation of Lease Rejection Damages
In brief
Yes, says the Delaware Bankruptcy Court in the case of CII Parent, Inc., cementing the advice routinely given by bankruptcy counsel to borrowers in default. We always counsel borrower clients in default of the risk associated with lenders taking unilateral actions pre-filing, stripping debtors of valuable options and assets. Thus, we normally recommend to always obtain a forbearance and undertake the preparations required to file a bankruptcy petition immediately upon forbearance termination, although whether or not to file depends on variety of factors that should be considered.
The Australian government introduced two significant new insolvency solutions following the enactment of the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth), as part of the federal government’s JobMaker Plan in response to the COVID-19 pandemic. The second of these solutions is the Small Business Debt Restructure Process (SBDRP).
The benefits of entering a SBDRP include: