Following on from the UK Supreme Court decision in Sequana (discussed here), the recent UK High Court (UKHC) decision in Hunt v Singh [2023] EWHC 1784 (Ch), further considered the duty of directors to take into account the interests of creditors in certain circumstances.
When a company is on the brink of entering into insolvency proceedings the tax impact, understandably, may not be at the forefront of everyone’s mind and so may be overlooked. However, entry into liquidation or administration or the appointment of a receiver can have an adverse impact on, and sever, UK tax groups. This can result in (unexpected) tax leakage and further depletion of assets, adding greater pressure to the distressed situation.
The England and Wales Court of Appeal recently handed down its first judgment relating to a restructuring plan under Part 26A of the UK Companies Act 2006: Re AGPS Bondco Plc [2024] EWCA Civ 24. Restructuring plans were a 2020 innovation in UK insolvency law, as described in our earlier alert.
There are two mechanisms through which a creditor may net amounts owed to the debtor against amounts owed by the debtor -- setoff and recoupment. These mechanisms are distinct and are treated very differently in a bankruptcy setting.
Key Issues
Setoff. Setoff is a right based in state law that allows parties to apply their mutual debts against each other. These rights are preserved in bankruptcy through Section 553(a) of the Bankruptcy Code, which does not create any federal right of setoff, but leaves such state law rights undisturbed.
(Moderate) Verschärfung der Haftung für Geschäftsleiter durch das StaRUG.
Am 17. Dezember 2020 hatte der Bundestag das Gesetz zur Fortentwicklung des Sanierungs- und Insolvenzrechts (SanInsFoG) beschlossen. Zentraler Bestandteil des SanInsFoG sind die Vorschriften des Gesetzes über den Stabilisierungs- und Restrukturierungsrahmen (StaRUG).
The recent judgment of HHJ Richard Williams, sitting as a High Court Judge, in Loveridge v Povey & Ors [2024] EWHC 329 (Ch) deals with what he described as a bitter dispute over the Loveridge family business. The business concerned was the operation of caravan parks in Worcestershire, Warwickshire and Shropshire, in part through five companies, and in part through three partnerships at will. The companies made use of interest-free inter-company loans repayable on demand
On May 25, 2023, Belgium enacted the Mobility Act, which transposes Directive (EU) 2019/2121 (the EU Mobility Directive). The EU Mobility Directive creates a comprehensive framework for corporate cross-border restructurings. It builds on the foundations of the 2005 Directive on cross-border mergers.
On 31 October 2023, Federal Law No. 51 of 2023 Promulgating the Financial and Bankruptcy Law (the Bankruptcy Law) was published in the United Arab Emirates (UAE) Official Gazette, repealing the prior federal law on bankruptcy (Federal Law No. 9 of 2016, the Prior Law) and significantly developing the bankruptcy regime in the UAE.
维好协议还好吗? 前 言 维好协议（KEEPWELL DEED）通常由在中国 1 注册成立的 母 公司签 署，为其 境 外 子 公司的融 资 进 行增信（CREDIT ENHANCEMENT）（见图表），最初常见于债券市场，近年 来也经常出现在贷款交易中。 提供维好承诺的母公司承诺维持其境外债务人子公司的财 务健康，以增强债权人对债务人的信心。 维 好协议 通常包含的承诺有：要求 维 好提 供方维持境外 维好协议与保证的主要区别 维好协议和保证有以下的重要分别 : 1. 仅就本文而言，“中国”或“中国内地”指中华人民共和国，不包括香港及澳门特别行政区和台湾。“境内”及“境外”有相应的意思。 债务人的净资产为正值、为其提供偿还债务的流动资金、 以 及保 持其对该等境 外债务人的管控 权和所有权等。其 中一些承诺或受制于取得相关中国政府部门的审批将资 金 汇出境 外的前 提 条 件，并且 维 好提 供 方必须尽最 大努 力获 得该 等审 批。除 签 署维 好协议 外，维 好 提 供 方通常 还 会 签 署股 权 购买承 诺（EQUITY INTEREST PURCHASE UNDERTAKINGS），即维好提供方承诺购买其境外债务人 子公司持有的若干股权，以便将资金（即购买对价）汇出境外。
The presentation of the Proposal for a Directive of the European Parliament and of the Council harmonising certain aspects of insolvency law (COM/2022/702) marks a significant step towards the convergence of fundamental aspects of insolvency law throughout the EU, which is considered fundamental if cross-border investment and cross-border business relationships are to reach their potential.