On 31 May 2022, the Australian Financial and Security Authority (AFSA) announced a new proposed vulnerability framework to assist businesses who are the most vulnerable within the insolvency framework. This is even more important in the wake of the COVID-19 pandemic, with many businesses facing financial distress for the first time. Those businesses may be unsure how to navigate the system and what options are available to them. AFSA’s proposed vulnerability framework plans to address these concerns.
Background to the new framework
Congress and the President finally extend the $7.5 million debt limit for Subchapter V eligibility:
- by “unanimous consent” in the Senate;
- by a vote of 392 – 21 in the House; and
A legislative history of the new law is at this link.
The new law is bi-partisan and uncontroversial. But there are some bells and whistles, as discussed below.
“SUNSET” – Again!
In the recent judgment In the Matter of GTI Holdings Limited delivered on 15 March 20221 , the Cayman Islands Grand Court reiterated the importance of principles of comity in cross-border insolvency matters and the central function of the place of incorporation.
A copy of the full judgment is available here.
Background
Conyers were instructed by Silver Base Group Holdings Limited (“Silver Base”) in relation to a successful application for the appointment of “light-touch” provisional liquidators for restructuring purposes before the Grand Court of the Cayman Islands.
Introduction
In the recent judgment of In the Matter of Margara Shipping Limited (the “Margara Decision”)1 the Cayman Islands Grand Court provided some useful guidance on the basis on which a company can be restored to the Register of Companies (the “Register”) and subsequently wound up pursuant to section 159 of the Companies Act (2021 Revision) (the “Companies Act”) and the Grand Court Rules (2022 Consolidation) (“GCR”), Order 102, Rule 18.
The Legal Basis to Restore and Wind Up A Company
Introduction
Legislative reforms to Part V of the Cayman Islands Companies Act will shortly be coming into force which will, amongst other things, introduce a new restructuring officer regime available to certain debtors in financial distress.
In the recent decision of Evergreen International Holdings Limited, delivered on 11 January 2022, the Grand Court of the Cayman Islands made an order for the immediate winding up of a company notwithstanding the company’s cross-applications for an adjournment of the winding up petition and the appointment of “light-touch” provisional liquidators for restructuring purposes. The Court dismissed the company’s cross-applications on the basis that there was no credible evidence which supported the company’s assertion that a viable restructuring was imminent.
The Insolvency and Bankruptcy Code, 2016 (“IBC”/”Code”) came into force on 28th May, 2016 with the primary objective of consolidating and amending the laws of reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner to maximise the value of their assets. The Code has been evolving over the last six years, with changing scenarios and adapting to practical circumstances along the way. As a result, the Code has undergone amendments from time to time.