Bankruptcy is one option for dealing with insolvency. Insolvency is the inability for an individual, or company, to pay their debts as and when they fall due. Although bankruptcy can provide bankrupts with relief from the majority of their debts, and essentially allow them to make a fresh start, there are also downsides. This article explores the consequences of declaring bankruptcy for both the bankrupt and their business.

The ramifications of bankruptcy are laid out in the following table:

In its recent decision Xuereb v Weber Construction Limited Et (decided 18 March 2021) the Civil Court (Commercial Section) weighed in once more on the appropriate tests to be applied when assessing a company's inability to pay its debts under Maltese corporate insolvency law. One of Weber Construction Limited's ("Weber") shareholders filed an application in court requesting the company's dissolution and consequential winding up on the grounds inter alia that it was unable to continue to pay its debts.

In a recent judgment delivered by the Supreme Court of India (“Court“) in Laxmi Pat Surana vs. Union Bank of India & Anr.¹, the Court has held that the principal borrower need not be a ‘corporate person’ for insolvency process to be initiated against a company which stood as its guarantor, under the Insolvency and Bankruptcy Code, 2016 (“IBC“).

Brief Facts of the Case

This article was originally published in the Australian Restructuring, Insolvency & Turnaround Association Journal (Volume 32 #01 2020)

The first of March marked the second anniversary of the changes to the Corporations Act 2001 (Cth) (Act) permitting an external administrator to assign rights to sue. The Australian Government proposed the reform in the hope that the ‘sale of rights of action may enable the value in such rights to be realised’[1].

You just heard that a customer has filed for bankruptcy — what do you do now? One of the first steps is to determine whether you should file a proof of claim.

How will I be alerted about the bankruptcy?

Bankruptcy adjudication is not automatic, and even in voluntary petitions, a prebankruptcy procedure needs to be initiated before the bankruptcy adjudication. In the prebankruptcy, the parties will submit evidence to prove whether the debtor is in general default. It is not sufficient that the debtor merely confesses a general default to the court.

There have been cases in Mexico where the debtor must walk through a long path to get the petition's admission, even in voluntary petitions.

This survey is now closed.

At the outset of the COVID-19 pandemic, provincial emergency orders required the majority of businesses to migrate their workforce to a work-from-home environment. As the pandemic has persisted, what was originally a short-term solution for many businesses, has led many of them to reconsider their current and future need for office space. For those businesses tied into long-term leases, many have turned to subleasing all or a portion of their space as a way to reduce their overhead.

The new Pre-Pack Regulations have been approved by the UK Parliament and are due to come into effect on 30 April 2021 for administrations commencing from then.

On 26 February 2021 the National Company Law Appellate Tribunal (NCLAT) allowed the invocation of a bank guarantee during a moratorium period imposed under Section 14 of the Insolvency and Bankruptcy Code (IBC) 2016. This article summarises the NCLAT’s decision in this case (Bharat Aluminium Co Ltd v JP Engineers Pvt Ltd).

Facts