Foreign insolvency proceedings (including those ordered by the UK courts) have no direct operation in Guernsey. Therefore foreign insolvency office holders looking to take steps in Guernsey, such a collecting in assets or compelling the production of information from third parties, will need to first be recognised under Guernsey law before steps can be taken in this jurisdiction.

Guernsey has not introduced legislation based on the UNCITRAL model law on cross-border insolvency. It is also not (and was not prior to Brexit) subject to the Recast Insolvency Regulations.

How do you improve the image of company voluntary arrangements? Start by reforming the voting rules.

The effect of a liquidation order is to crystallise an insolvent company’s position in time and to ensure that no further transactions can be concluded by that entity. In other words, once a company is in liquidation and the concursus has occurred, no creditor may exercise its rights against that company in a manner prejudicial to other creditors.

This is a well-established principle of South African law, but what does it mean for a security taker wishing to, by agreement with the insolvent company, rectify a written agreement concluded prior to liquidation?

The High Court has granted leave to a taxpayer to appeal a District Court decision declining to dismiss charges of evading or attempting to evade assessments of payment of tax by him or another person. The High Court rejected the taxpayer’s submissions that the fact of his bankruptcy meant that he could not be liable for the charges brought against him. The Court held that a bankrupt could be charged for evading or attempting to evade the payment of GST when that bankrupt had operated a company that had charged and received GST on taxable supplies.

Facts

The Bankruptcy Protector

On August 18, 2022, the United States Bankruptcy Court for the Southern District of Indiana, in In re BWGS, LLC, No. 19-01487-JMC-7A, 2022 WL 3568045 (Bankr. S.D. Ind. Aug. 18, 2022), narrowly interpreted the safe harbor provision in section 546(e) of the Bankruptcy Code by refusing to dismiss a lawsuit against a guarantor whose liability was eliminated by the debtor’s payment to the bank that held the guarantee.

Overview on Section 546(e) of the Bankruptcy Code

The High Court has held an original tenant and guarantor of a lease liable for unpaid sums due where the new tenant had compromised its liabilities under the lease pursuant to a restructuring plan under Part 26A of the Companies Act 2006 (CA 2006). Read on for our analysis of Oceanfill Limited v Nuffield Health Wellbeing Limited and Cannons Group Limited [2022] EWHC 2178 (Ch).

The lease and licence to assign

An exclusive jurisdiction clause (EJC) is a clause in a contract limiting the determination of disputes under that contract to one agreed jurisdiction or forum. It has been unclear whether an EJC could be relied upon to dispute a debt in the context of bankruptcy proceedings. It is trite that a bona fide dispute on the debt on substantial grounds is sufficient for a bankruptcy or winding-up petition to fail.

This week’s TGIF examines Sentinel Orange Homemaker Pty Ltd v Davis Investment Group Holdings Pty Ltd (in liquidation) (No 2) [2022] NSWSC 1171 where a court considered an application for non-party costs orders against a litigation funder and the liquidator of an insolvent defendant.

Key takeaways

In significant news for the insolvency industry, the High Court will hear the long-awaited Gunns Group preference claim appeal in Bryant & Ors v Badenoch Integrated Logging (A10/2022) on 18 October 2022.

Johnson Winter & Slattery act for PwC, the appellant liquidators of the Gunns group, in the proceeding.

Briefly stated, the grounds for the appeal are:

Two recent cases examine whether, given the impossibility to liquidate a company due to a corporate deadlock, a court can invalidate certain resolutions at the request of one shareholder.