The corporate insolvency aspects of Directive (EU) 2019/1023 on preventive restructuring were recently implemented in Ireland through the European Union (Preventive Restructuring) Regulations 2022.

Last week, the Supreme Court of the United Kingdom released its judgment in BTI 2014 LLC v Sequana SA. This marks the first occasion on which the nature, scope and content of directors' duties to creditors when a company is nearing insolvency (the "Creditor Duty") has been considered by the Supreme Court.

Yesterday, 17 October 2022, Revenue announced a significant update to the Debt Warehousing Scheme (DWS). Under the DWS, taxpayers with deferred liabilities had until the end of 2022 (and for certain qualifying business, 30 April 2023) to either settle their outstanding liabilities (at 0% interest) or to establish a Phased Payment Arrangement with Revenue (at 3% interest). In light of the current challenging economic environment, Revenue have now extended this deadline to 1 May 2024.

In an insolvency of a company under Insolvency and Bankruptcy Code, 2016 (IBC), prospective bidders place bids for purchase of the insolvent company. Before placing such bids, prospective bidders are expected to deep dive into the financial position of the company and arrive at a proposed value for purchasing the company.

The European Union (Preventive Restructuring) Regulations 2021 (the Regulations) were signed into law in Ireland on 27 July 2022. The Regulations provide for the transposition of the mandatory articles of Directive (EU) 2019/1023 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (the Directive).

The Insolvency and Bankruptcy Board of India (“IBBI”) notified the IBBI (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2022 on September 16, 2022 (“Fourth Amendment”) and the IBBI (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2022 on September 20, 2022 (“Fifth Amendment”). The Fourth Amendment and the Fifth Amendment are collectively referred to as the “Amendments”). We have summarised the Amendments below.

The amendments follow the recent high profile decision in The Australian Sawmilling Company Pty Ltd (in liq) & Ors v EPA & Anor [2021] VSCA 294 (TASCO Judgment). Insolvency practitioners should be aware that the amendments are aimed at preventing liquidators from disclaiming liability for environmental clean-up costs.

TASCO Judgment

Since 1988, the ‘rule in West Mercia’ – so named after the West Mercia Safetywear v Dodd Court of Appeal case – has been the leading authority for when directors of financially stressed companies are subject to the so-called ‘creditor duty’, namely the duty to consider the interests of the company’s creditors.

In both jurisdictions the general consensus was that where a company is insolvent, the fiduciary duty of its directors to act in the interest of the company (Irish law), or in the way they consider, in good faith, would be most likely to promote the success of the company in the interests of its members as a whole (English law), altered such that directors were required to treat creditors' interests in priority to shareholders' interests. Directors must consider the interests of creditors as a whole, and not just the interests of any individual creditor or class of creditors.

On 27 July 2022, the European Union (Preventive Restructuring) Regulations 2022 (S.I. 380/2022) (the Regulations) amended the Irish Companies Act 2014 (the Act) by transposing certain requirements of Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 (the Directive) not already provided for in Irish law.

This has resulted in a number of modifications to the examinership regime and, for the first time, a codification of directors' duties when companies are in the `zone of insolvency'.

The changes to the Examinership regime include: