The much-anticipated UK Supreme Court decision in BTI 2014 LLC v Sequana SA & Ors was finally released, giving clarity to directors and insolvency practitioners about the existence, scope and engagement of the so-called “creditor duty”. A relatively recent development in English law, the creditor duty is in fact really a dormant creature of the existing directors’ fiduciary duties that awakens in an insolvency, or near insolvency, context.
Introduction
The court ruled that:
Insolvency Proceedings are commenced upon bankruptcy of a debtor. In simple terms, bankruptcy is inability of a corporate debtor to pay back its creditors. Insolvency and Bankruptcy Code, 2016 (“IBC”) governs insolvency proceedings in India. A corporate insolvency resolution process (“CIRP”) is a recovery mechanism for the creditors of the corporate debtor and the CIRP can be initiated under Section 7 & Section 9 of the IBC.
Recently, the Supreme Court of the United Kingdom released its judgment in BTI 2014 LLC v Sequana SA1. 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.
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).
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:
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.