The United States Court of Appeals for the Fifth Circuit entered its (second) opinion in the case of In re Ultra Petroleum Corporation, Case No. 21-20008, on October 14, 2022, potentially widening a circuit split on the issue of “make-whole” payments. With the circuit split potentially growing, this issue could be ripe for a grant of certiorari.

The recent case of PSV 1982 Limited v Langdon [2022] has clarified what is a ‘relevant debt’ of a company which uses a ‘prohibited name’ and for which a director or person who manages that company can be personally liable for. 

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Executive Summary

A new decision out of the New York state court has added to the recent trend of courts refusing to dismiss legal challenges to priming transactions.

A U.S. bankruptcy court recently denied chapter 15 recognition to a case in the Isle of Man (IOM). The court ruled that the foreign case was neither a foreign main proceeding nor a foreign non-main proceeding. Although the court found that the IOM proceeding was a “foreign proceeding,” it also held that the debtor’s center of main interests wasn’t in the IOM and the debtor didn't have an establishment there. In re Shimmin, No.

Objective

In the context of an insolvent or near insolvent company, a receiver will be appointed, in the ordinary course, by a secured creditor seeking to have the assets which are the subject of its security realised to enable the payment of its claim. The appointment, most often, will be made under the agreement by which the security is granted or might be made under one of the property law statutes which authorise the appointment of a receiver by the court for the purpose of enforcing a security.

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The Supreme Court has handed down its long-awaited judgment, which as Lord Reed noted, considered issues that go to the heart of our understanding of company law and are of considerable practical importance to the management of companies.

Background to the Appeal

Between the lines... For Private Circulation-Educational & Information purpose only Vaish Associates Advocates… Distinct. By Experience. I. Supreme Court: The actual gain or loss is immaterial, but the motive for making a gain is essential. The Supreme Court (“SC”) has, in its judgment dated September 19, 2022, in the case of Securities and Exchange Board of India v. Abhijit Rajan [Civil Appeal No. 563 of 2020], held that in deciding cases pertaining to insider trading, the actual gain or loss is immaterial, but the motive for making a gain is essential.

Under Irish and UK law, company directors owe fiduciary duties to act in good faith in the interests of the company. The company's interests in this context usually means the collective best interests of the members. However, UK and Irish authorities have developed directors' common law duties, such that in cases of insolvency, directors have a duty to consider the interests of the company's creditors.