The much-anticipated BHS judgment is here.

For those without the time to digest all 533 pages immediately, we have summarised the key points below:

Introduction

In the dynamic and rapidly evolving global marketplace, particularly in fast-growing economies like India, there are ever-growing commercial transactions amongst entities within India as also in international transactions amongst entities within India and outside of India.

On June 6, 2024, the Supreme Court of the United States issued its much-anticipated decision in Truck Insurance Exchange v. Kaiser GypsumCo., Inc., et al. No. 22-1079. In a unanimous decision authored by Justice Sotomayor,¹ the Court vacated a Fourth Circuit decision and ruled in favor of Truck Insurance Exchange, confirming that an insurer with financial responsibility for a bankruptcy claim is a "party in interest" and therefore has standing to object to a Chapter 11 plan.

Redefine Australian Investments Limited (Company), an Irish-registered company was placed in voluntary liquidation on 24 January 2018. Martin Ferris was appointed as the liquidator (Liquidator).

The Proceedings

In a case brought by the liquidators, the High Court found two former directors liable for wrongful trading; that is, continuing to trade when they knew or should have known that there was no reasonable prospect of avoiding insolvency (section 214 of the Insolvency Act 1986).

In Chapter 11 cases, one of a vendor’s best shots at getting paid its pre-petition debt is being designated as a “critical vendor”.

In connection with the Zachry Holdings Chapter 11 case filed in the Southern District of Texas on May 21, 2024, the Bankruptcy Court made disturbing comments regarding treatment of critical vendors.

In a bankruptcy case, a preference action1 is often asserted pursuant to Section 547 of the Bankruptcy Code against a creditor to claw back funds paid to the creditor in the 90 days prior to the bankruptcy. While the most common defenses to a preference action are the ordinary course of business defense2, the new value defense3, and the contemporaneous exchange for new value defense4, there are other defenses that a savvy creditor should consider to reduce or even eliminate preference liability.

Key Issues

In the late 2023, the Indonesia Supreme Court (Mahkamah Agung, or “MA”) issued Circular Letter Number 3 of 2023 on the Implementation of the 2023 Supreme Court Plenary Meeting Resolution as Guidelines for the Implementation of Court Duties (“Circular 3/2023”). Circular 3/2023 provides the Supreme Court’s interpretation on several regulations which specifically focuses on how the court should enforce and implement the regulations, most notably regarding language regulations and bankruptcy.

This author—whose practice is heavily weighted toward representation of official committees in large chapter 11 cases—has previously penned articles relating to questions surrounding the permanency of an official committee.

In a recent judgment¹, the High Court determined (contrary to the arguments of the affected secured creditor) that a debenture created a floating charge rather than a fixed charge over certain internet protocol (IP) addresses. Whilst elements of the decision are inevitably fact-specific, some broader lessons and reminders can be taken from the judgment which will be of general relevance to lenders when taking security.