ICC Judge Greenwood’s judgment in Kendall & Anor v Ball & Anor (Re Sherwood Oak Homes Ltd – Sherwood Oak Holdings Ltd) [2024] EWHC 746 (Ch) arises out of an application by the administrators of Sherwood Oak Homes Ltd and Sherwood Oak Holdings Ltd under para 63 Sch B1 Insolvency Act 1986 and/or s 234 Insolvency Act for a declaration that land forming part of a development site in Mansfield Woodhouse was held on resulting and/or constructive trust for the benefit of Homes or Holdings and an order for its transfer.

Preferences are a common issue in bankruptcy proceedings. A general overview of preferences in bankruptcy can be found here.

The Bankruptcy Code provides several affirmative defenses to assist creditors in mitigating or eliminating their preference exposure. We have previously addressed the new value defense2 and the ordinary course of business defense3. This article will briefly address another common affirmative defense: the contemporaneous exchange defense.

In 2021, the FCA published its Guidance for IPs on how to approach regulated firms. Since then, there have been changes in the legal framework affecting firm failure, changes in the regulatory framework and changes in the UK economic climate.

The FCA is consulting on amendments to reflect these changes including:

Die Anforderungen der Finanzverwaltung an die Steuerfreiheit von unternehmensbezogenen Sanierungen steigen in der Praxis.

The Court of Civil Appeal (CCA) delivered an interesting judgment on the adequacy of affidavit evidence when making a bankruptcy order. The CCA, acting solely on the basis of affidavit evidence, upheld an order of the Bankruptcy Court adjudging the appellant (Mr Balgobin) bankrupt pursuant to Section 8 of the Insolvency Act. The issues raised on appeal by the Appellant and which the CCA had to determine on were:

The Supreme Court of Gibraltar has confirmed that the court does not have the power to extend the time for the filing of an application to set aside a statutory demand issued under the Insolvency Act 2011.

A party that claims it is owned monies (the amount must be more than £750) is entitled to issue a statutory demand against the debtor. If the debtor does not apply to the court to set aside the demand within 21 days of being served, the court has no power to extend the time for doing so.

In the current market, investors are increasingly considering their options in relation to the stressed and distressed credits in their portfolios. Whilst mindful of stakeholder relationships, secured lenders may, in some circumstances, wish to consider the "nuclear option": enforcing their share pledge over a holding company of the operating group (ideally, such pledge being over a single company which directly or indirectly holds the entire business - a "single point of enforcement").

In the recent decision of Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] SGCA 10 (dated 27 March 2024), the Singapore Court of Appeal upheld a director’s breach of duty by authorising the payment of a dividend and the repayment of a loan to himself. The decision, considering Sequana, sheds further important light on the directors’ duty to consider or act in the interest of the company’s creditors, coined as “creditor duty”.

The Facts – Briefly Stated

The Porter Davis liquidation in early 2023 put into sharp focus the practice of some builders taking deposits from owners before obtaining domestic building insurance for their work, insurance that helps to protect owners in the event of a builder’s insolvency.

In the case of Porter Davis, this practice left thousands of owners without insurance to recover the loss of their deposits, leading the State Government to implement a relief scheme to compensate home owners over $28 million, later extended to 20 February 2024 and expanded to other builders in liquidation.

When a bankruptcy debtor rejects a lease, a landlord is entitled to a rejection damages claim. Under Section 502(b)(6) of the Bankruptcy Code, a landlord’s claim is capped at “the rent reserved by such lease, without acceleration, for the greater of one year, or 15%, not to exceed three years, of the remaining term of such lease.”

Courts have taken two different approaches in interpreting what constitutes the “15%” in the statute: (A) the remaining rent due under the lease; or (B) the remaining time under the lease.

The “Rent Approach”