In the recent case of TMG Brokers Ltd (In Liquidation) (also known as: Baker v Staines) the High Court held a director of a company to be jointly and severally liable for payments made by his co-director out of the company’s bank account which were made without proper authority and amounted to disguised distributions of capital. The fact that he had placed trust in the other director for the company's financial affairs did not excuse him from performing his duties.

Background

Today Ukraine continues to undergo the reform of the bankruptcy system, aimed at improving the business environment and increasing the investment attractiveness of the country. The bankruptcy proceeding seems like a major challenge for a creditor, as it is usually a tedious and time-consuming process. In order to speed it up and make it more efficient, the Bankruptcy Code of Ukraine was adopted in 2019 (hereinafter — the “Code”). One of the objectives of the Code is to satisfy creditors’ claims. But it also aims to protect debtors’ rights.

In what is likely to be the most significant change to the UK restructuring and insolvency market since the Enterprise Act 2002, the Court has paved the way for restructuring plans (RPs) under Part 26A to the Companies Act 2006 to be used to compromise the rights of landlords, financial creditors and other unsecured creditors provided the company shows that those creditors are “out of the money”.

Despite ruling in favour of the peak indebtedness rule’s existence only 12 months prior, on Monday, the Federal Court reversed its decision in Badenoch Integrated Logging Pty Ltd to revoke the rule’s operation in Australia.

Background

The liquidators of Gunns, a major forestry enterprise, commenced proceedings for an unfair preference claim under section 588FA of the Corporations Act 2001 (Cth) against Badenoch Integrated Logging Pty Ltd, a haulage and timber harvesting contractor.

In recent years, it has become increasingly common for companies seeking to avoid an immediate winding-up order, particularly listed companies, to pray in aid of alleged efforts to restructure their debts in a bid to obtain adjournments of a winding-up petition. All too often, these valiant attempts fail: see Re Chase On Development Limited [2020] HKCFI 629, Re SMI Holdings Group Limited [2020] HKCFI 824 and Re REXLot Holdings Ltd [2020] HKCFI 2212 to name a few.

The Irish Government has published the details of a new 'out-of-court' rescue process for small companies, the Small Company Administrative Rescue Process or 'SCARP'. The process seeks to borrow some features from the well-established examinership rescue process, but with one fundamental difference, being the limited role of the Irish courts proposed for SCARP. The relative high cost of examinership for smaller companies has historically been found to be a barrier for entry.

The pavlova, women’s right to vote, the flat white, the Rugby World Cup… New Zealand has a storied history of beating Australia to the punch. However, Aussie liquidators might not be so keen to throw their trans-Tasman cousins a friendly ‘chur!’ as their ability to pursue unfair preference claims continues to be eroded following the recent Full Court decision in Badenoch.

In the landmark case of Re China Huiyuan Juice Group Limited [2020] HKCFI 2940, Mr Justice Harris recalibrated the Hong Kong winding-up jurisdiction and its application to an offshore incorporated, Hong Kong-listed entity.

In particular, the decision explains why the Hong Kong court may be unable to wind-up an offshore incorporated, Hong Kong-listed company where all of the company’s operating assets are in the Mainland.

The Material Facts

The National Security and Investment Act 2021 creates a new screening regime for transactions which might raise national security concerns in the UK. It passed into law on 29 April 2021 and is expected to come into effect by autumn 2021.

However, as the Act has retrospective effect from November 2020, insolvency practitioners need to understand the implications for insolvency sales taking place now. We have summarised the headline issues for insolvency practitioners below.

You need to consider the impact of this Act on transactions that are taking place now.

In the recent decision of Polyline Development Ltd v Ching Lin Chun and Others [2021] HKCFI 483, Mr Recorder Manzoni SC struck out the Plaintiff’s statement of claim and action on a number of grounds. At para. 9 of the judgment, the learned Recorder highlighted the length of the submissions and evidence put forward by the parties, before remarking that “it may be thought that if such voluminous material is necessary in order to persuade the court that the claim is obviously unsustainable, the application is somewhat ambitious”