In a recent decision, Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88, lenders to the Arrium Group, a company that collapsed, have lost their appeal regarding the personal liability of the Chief Financial Officer and Group Treasurer. The NSW Supreme Court had previously dismissed the lenders' claims, and the Court of Appeal has now affirmed that decision.
In the case of Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2) [2021] NSWSC 1025 (Anchorage v Sparkes), the Supreme Court of NSW considered the obligations of company officers to sophisticated commercial lending entities, and whether company officers could be personally liable for making misleading statements.
Significance
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").
Key takeaways
In BTI 2014 LLC v Sequana SA and others,1 the UK Supreme Court considered for the first time the existence, content and triggers of the obligation on directors to have regard to the interests of creditors when a company becomes insolvent or is bordering on insolvency (the Creditor Duty).
This decision addresses important issues for directors, stakeholders, and advisors of UK companies.
Background
In a recent decision in the high value bankruptcy of Pramod Mittal (Mr Mittal), the Chancery division considered the rules on service of insolvency applications. The decision underlines the importance of adhering to service rules and giving as much notice as possible of insolvency applications.
Understanding limitation periods are of crucial importance in the construction industry, particularly when a contractor is faced with unpaid invoices for services or materials rendered. The Ontario Court of Appeal stepped back into the spotlight in this regard with its decision in Thermal Exchange Service Inc. v Metropolitan Toronto Condominium Corporation No. 1289, 2022 ONCA 186, in holding that a defendant's assurances may prolong the "discoverability" of a claim for non-payment.
Background
The High Court has clarified the grounds for challenging a CVA for guarantee creditors.
Background
In two cases in as many months, the Supreme Court tackled the application of sovereign immunity in two separate insolvency statutes. Two separate government-like entities suffered conflicting fates while the Court (arguably) employed the same analysis. How so?
Clear Statement Rule
On April 24, 2023, the First Circuit’s opinion in Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin came up for oral argument before the Supreme Court. At issue in this appeal is whether this provision’s “abrogat[ion]” of sovereign immunity “as to a governmental unit,” defined to include any “other … domestic government” in section 101(27), embodies a congressional intention to revoke the sovereign immunity of a Native American tribe with sufficient and obvious clarity to be construed as such a revocation.
Bed Bath & Beyond, the home goods retailer, has filed bankruptcy under Chapter 11 and plans to conduct liquidation sales and close all of its brick-and-mortar stores by June 30, as reported by The New York Times. The retailer points to an inability to adjust to the growth of online shopping as a reason for its downfall.