The concept of an ‘insolvent trust’ is somewhat of a paradox. A trust is not a separate legal entity in the way that companies are and, as such, cannot be insolvent in the technical sense. Trustees legally own assets in a trust for the benefit of beneficiaries.
5 Most Impactful Hong Kong Restructuring and Insolvency cases in 2023
2023 was a busy year for the restructuring and insolvency industry in Hong Kong. we had a ground breaking decision of the Court of Final Appeal (CFA) ruling on the conflict between dispute resolution clauses and the Court’s jurisdiction to wind-up/bankrupt a debtor. We also saw the court extend and strengthen its reach to assist insolvency officeholders (whether appointed in Hong Kong or elsewhere).
It is a rare occasion that one can be assured with certainty that, if they file a motion with a bankruptcy court, it will be granted. But, in the Third Circuit, that is exactly what will happen if a creditor or other party in interest moves for an examiner to be appointed under Section 1104(c) of the Bankruptcy Code. Once considered to be within the discretion of a bankruptcy court “as is appropriate,” the appointment of an examiner is now guaranteed if the statutory predicates are fulfilled according to the Third Circuit Court of Appeals.
In one of the most highly anticipated judgments in the European restructuring market in recent years, on 23 January 2024, the English Court of Appeal overturned the High Court’s decision sanctioning the Adler restructuring plan.1
Dispute Resolution analysis: In November 2023, Mr Justice Miles sanctioned restructuring plans under section 901F of the Companies Act 2006 in respect of two companies within the Atento group. The plans had significant creditor support, did not involve any cross-claim cram down and achieved a demonstrably better outcome for creditors than the alternative, a group-wide liquidation.
Re Atento UK Ltd [2023] EWHC 3076 (Ch))
What are the practical implications of this case?
Fraudulent trading is both a civil and criminal offence. The recent judgment of the High Court in Bouchier v Booth provided a helpful reminder of the principles that a Court will apply when considering whether directors have acted in a manner that constitutes fraudulent trading and the high threshold for proving fraudulent conduct.
1. 始めに
年始になると、今年の経済・法律情勢はどうかという話がよく議論される。特に日本はゼロゼロ融資の問題 もあり、法的倒産事件が増加するのではないかとも議論されるが、近時の情勢においては、それ以外のいく つかの点に留意する必要があるように思える。概括すると、①法的倒産手続への社会の期待はそれほど大き くない状態にあること、②他方で、経済的苦境以外の法的問題点が増加していること、③もう少し幅広い視
点で見ると、経済環境の変化をどのように捉えるか、という 3 点が重要といえる。
2. 私的整理手続が活発な理由
When leveraged buyouts (“LBOs”) fail, the selling shareholders are litigation targets. A common suit is a claim by a bankruptcy trustee asserting constructive fraudulent transfer claims seeking to claw-back payments to the selling shareholders from the loan proceeds that financed the LBO.
In the Matter of Holt Fund SPC (Unreported, 26 January 2024) is the first occasion where an application has been made to appoint Restructuring Officers over portfolios of a segregated portfolio company. At first glance the judgment appears uncontroversial. However, it highlights a lacuna in the law which readers should be aware of.
Background
The Petitioner sought the appointment of Restructuring Officers (ROs) in respect of two segregated portfolios of the Holt Fund SPC.
The Superior Court of Quebec rules in favor of Export Development Canada (“EDC”) and enforces a "[unequivocal]" Waiver against the surety who signed it in the context of a loan guarantee granted to the RBC.
Relevant Facts