Among the measures announced by the Prime Minister and Minister of Finance of Malaysia, Dato’ Seri Anwar Ibrahim, during his 2023 Malaysia Budget Speech on 24 February 2023 was a proposal to amend the Insolvency Act 1967 (‘the Act’) to enable bankrupts to be automatically discharged quickly.
The Finance Minister added that pending the amendment of the Act, “minor cases” involving debts of less than RM50,000 that fulfil the criteria will be immediately discharged beginning 1 March 2023.
Re Kirkham International Pte Ltd (in compulsory liquidation) [2023] SGHC 19 (Kirkham) has important practical implications for liquidators. The General Division of the High Court (High Court) held that a liquidator’s appointment of solicitors, when approval is required under section 144 of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), cannot be retrospectively authorised.
Background
Where a commercial property is sold by a receiver or insolvency practitioner (IP), VAT must be charged on the sale if the owner had exercised and properly notified an option to tax (OTT) in respect of the property. The IP acting on behalf of the seller needs to establish whether an OTT has been made and notified so that VAT is charged , if needed. This can be difficult if company records are in disarray, directors of the insolvent company are non-cooperative and/or the IP or receiver has limited knowledge of the property and company.
Last year saw the construction industry face significant challenges, insolvency levels were up with over 5,000 company failures and nearly 23,000 companies in distress by the last quarter.
Construction businesses in the North-East had the second highest sector insolvency rates, with an estimated 540 companies suffering from distress in the last quarter of 2022 – the highest of any sector.
This distress has now come to fruition with the recent insolvencies of two of the North East’s largest main contractors, Metnor Construction and Tolent Construction.
Commercial activities are subject to constant change and in occasions those that engage in them may face financial difficulties, which may originate within a specific industry or from global external factors such as the Covid-19 pandemic, the supply chain crisis, or other social and political events such as government elections.
Las actividades comerciales son susceptibles a cambios constantes y en ocasiones, aquellas personas que participan en el comercio enfrentan dificultades financieras. Dichas dificultades pueden ser propias del giro comercial del empresario; o pueden ser originadas por factores externos que afecten a un sector comercial o industrial específico de manera negativa, tales como la pandemia originada por el Covid-19, la crisis en la cadena de suministros, así como eventos sociales o políticos.
Relief under ss 423-425 Insolvency Act 1986 is not limited to cases of insolvency, as the decision of David Edwards KC, sitting as a High Court judge in the Commercial Court, in Integral Petroleum SA v Petrogat FZE & Ors ([2023] EWHC 44 (Comm)) demonstrates.
1. Introduction
The market for distressed transactions is expected to grow in 2023 but will also become more difficult. This makes it all the more important to deal with the specific legal aspects of acquiring a company in times of crisis or insolvency at an early stage.
2. A look back at 2022 and ahead to 2023
The new year has seen a rapid pace being set in terms of anticipated and actual legislative, regulatory and common law changes across Australia’s restructuring and insolvency regimes. The federal government’s inquiry into restructuring and bankruptcy laws is ongoing against a backdrop of sustained monetary policy interventions.
This half-yearly update summarises significant insurance coverage cases in the English courts in the second half of 2022 concerning Covid-19 business interruption insurance, jurisdiction and rights against insurers of insolvent companies.
Significant Insurance Coverage Cases in H2 2022
Covid-19 BI Cases: