The consequent distress in the market is evident with 9 supplier insolvencies in the last few weeks alone, including Avro Energy, Utility Point and People’s Energy.
Today, 1 October 2021, is important as Ofgem is due to increase tariff caps from that date. This is also the date when the restrictions on petitioning for the winding up of companies on the basis of insolvency will be eased.
Legal landscape – energy regulations
In distressed situations, there are a number of issues to navigate, including:
There have been two recent changes to the insolvency laws in England and Wales relating to winding up petitions1 and Part 1A moratoriums.
Winding up petitions – Relaxation of restrictions
In SolarReserve CSP Holdings, LLC v. Tonopah Solar Energy, LLC, C.A. No. 78, 2021 (Del. Aug. 9, 2021), the Delaware Supreme Court recently dismissed a books-and-records appeal as moot and vacated a judgment issued by the Court of Chancery after appellee Tonopah Solar Energy, LLC (Tonopah) emerged from a Chapter 11 bankruptcy proceeding as a new limited liability company operating under a new limited liability company agreement.
Following the landmark decision by Justice Trower in Re DeepOcean 1 UK Ltd,1 Justice Snowden delivered another important judgment on the use of cross-class cram downs as he sanctioned the Virgin Active2 restructuring plans.
In addition to the extension to the commercial eviction ban until 30 June 2021, the UK Government has now also extended the moratorium on commencing winding-up proceedings until 30 June 2021.
You may view the regulation from the UK Government at gov.uk.
On 16 March 2021, the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin) declared Greensill Bank AG (Greensill) to be an indemnification case, meaning that German deposit insurance institutions can compensate the bank’s creditors.
BaFin had previously filed an insolvency petition against Greensill, and the insolvency court in Bremen opened insolvency proceedings on 16 March 2021. It appointed an insolvency administrator who is now responsible for managing Greensill’s affairs.
The case in question is CIMB Bank Bhd v. World Fuel Services (Singapore) Pte Ltd [2021] SGCA 19. The decision was delivered on 5 March 2021 by the Singapore Court of Appeal.
The judgment addresses issues surrounding claims by a bank under assignments and other security documents over rights in and receivables under commodities supply contracts, and overturns the Singapore High Court decision in CIMB Bank Bhd v. World Fuel Services (Singapore) Pte Ltd [2020] SGHC 117.
Summary
In Re Swiss Cottage [2022] EWHC 1495 (Ch), junior creditors argued that administrators appointed to two companies had exceeded their powers and breached their duties when selling two properties.
Background
On 18 January 2022, Hong Kong-listed cruise operator Genting Hong Kong Limited ('Genting HK') filed for provisional liquidation with the Supreme Court of Bermuda after it failed to secure access to liquidity. Genting HK has since gone into liquidation.
Background
On 1 October, Ordinance 2021-1193 introduced changes to the 'accelerated safeguard' procedure making this the 'preventive restructuring framework' as required by the 2019 Directive.
Certain conditions for the opening of an accelerated safeguard procedure have been retained with some modifications: