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 UK Supreme Court handed down its decision in BTI v Sequana on 5 October 2022, unanimously dismissing the appeal from the 2019 Court of Appeal decision and confirming how directors duties ought to be applied when a company is in the zone of insolvency. Although decisions of the UK Supreme Court are not binding upon the jurisdictions in which Ogier practises law, it will nevertheless be highly persuasive and influence the approach taken in the offshore jurisdictions that Ogier advises upon.
Introduction
The approach of the Cayman Grand Court to the terms and timing of the discharge of provisional liquidators of In the Matter of Star International Drilling Ltd (unreported, FSD 88 of 2021 ASCJ) may provide a window into what is expected to be a similarly flexible approach to the appointment of restructuring officers.
Star International Drilling Ltd's application to discharge its joint provisional liquidators
The Judgment of the Supreme Court in BTI 2014 LLC v Sequana SA was handed down on 5 October 2022.
The Supreme Court considered the circumstances in which company directors must exercise their duties under s.172 Companies Act 2006 (CA06) with regard to the interests of the creditors and affirmed the position reached by the Court of Appeal.
Comment
60 second speed read:
Introduction
It is common for construction project owners to finance projects through multiple mortgages, especially in times of rising construction costs. However, when an insolvency situation arises, holdback priority claims from contractors and subcontractors are particularly complex when there are multiple building mortgages involved. The Ontario Superior Court (Commercial List) provided new clarity in this regard in its April 29, 2022 decision in BCIMC Construction Fund Corp. et al.
Background
On 5 October 2022, the Supreme Court handed down its long-awaited judgment in BTI 2014 LLC v. Sequana S.A. [2022] UKSC 25 concerning the trigger point at which directors must have regard to the interests of creditors pursuant to s.172(3) of the Companies Act 2006 (the "creditors' interests duty").