The Supreme Court has unanimously dismissed the appeal of the decision in BTI –v- Sequana.
At a time when many companies are facing financial difficulties and directors are considering their legal duties, this long-awaited judgment has confirmed that directors have a 'creditor interest duty' when a company is insolvent or bordering on insolvency or an insolvent liquidation or administration is probable.
Background
In brief
The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company's creditors.
Contents
In brief
The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company's creditors.
Contents
The United Kingdom Supreme Court has just released an important insolvency judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 25 (Sequana), which concerns when and the extent to which directors of a company must consider the interests of creditors.
The United Kingdom Supreme Court has just released an important insolvency judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 25 (Sequana), which concerns when and the extent to which directors of a company must consider the interests of creditors.
The Cayman Islands' Companies (Amendment) Act, 2021 (the Amendment Act) has now come into force. The Amendment Act introduces a new corporate restructuring process and the concept of a dedicated 'restructuring officer' into the Cayman Islands Companies Act (2022 Revision). Under the Amendment Act, the filing of a petition for the appointment of a restructuring officer triggers an automatic global moratorium on claims against the company, giving it the opportunity to seek to implement a restructuring.
Cayman Islands companies have dominated the restructuring news cycle of late for a variety of reasons, including recent judicial commentary as to the effect of obtaining recognition under Chapter 15 of the U.S. Bankruptcy Code.
Introduction
The Grand Court of the Cayman Islands has recently offered additional, useful guidance in the growing jurisprudence on the insolvency of Segregated Portfolio Companies (“SPCs”). We have previously discussed the applicable test of insolvency that applies to the appointment of a receiver in respect of a segregated portfolio (“SP”) of an SPC here.
The long awaited reforms to Cayman Islands restructuring laws will come into force on 31 August 2022. The formal gazetting of these laws today (29 July 2022) has helpfully provided a hard-and-fast commencement date.
Debtors will now be able to file in the Cayman Islands court for the appointment of restructuring officers and obtain an immediate stay on unsecured creditor action, without the need to file a winding up petition.
These new proceedings, while retaining all that is positive with the prior law, will significantly enhance the Cayman Islands restructuring regime by:
In October 2022, the Privy Council delivered its judgment in the Z Trust case of Equity Trust (Jersey) Ltd (Respondent) v Halabi (in his capacity as Executor of the Estate of the late Mdam Intisar Nouri) (Jersey)which was consolidated with ITG Ltd and others (Respondents) v Fort Trustees Ltd and another (Appellants) (Guernsey).The Privy Council considered the nature and scope of the right of a former trustee to recover from or be indemnified out of assets of an insolvent trust in respect of liabilities and other expenditures proper