Since 1 October 2022, the Singapore International Commercial Court now has jurisdiction to hear cross-border restructuring and insolvency matters. In addition, foreign lawyers may be appointed to make submissions in restructuring and insolvency proceedings in the SICC. Lawyers may even enter into conditional fee agreements with their clients for selected proceedings provided that certain safeguards are met.

The Supreme Court’s decision in BTI v Sequana & Others represents the most significant ruling on the duties of directors of distressed companies of the past 30 years.

This Supreme Court decision considers the balancing exercise which directors are required to carry out between the respective interests of creditors and shareholders when a company is in financial distress.

This note summarises the key points from the ruling and the practical effect of this decision.

In brief

The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company's creditors.

Contents

In brief

The UK Supreme Court has handed down its long-awaited judgment in relation to the case of BTI 2014 LLC (Appellant) v. Sequana SA and others (Respondents) [2022] UKSC 25, concerning the duty of directors of a company registered under the Companies Act 2006 to consider (and act in accordance with) the interests of the company's creditors.

Contents

A bankruptcy discharge releases the debtor from pre-bankruptcy debts or liabilities. The purpose is to give the debtor a “fresh start” from excessive debts that cannot be repaid, except in certain situations such as where the debt arises from deceitful or fraudulent conduct. In Poonian v. British Columbia (Securities Commission), the British Columbia Court of Appeal held that securities sanctions are excluded from bankruptcy discharge.

A recent Hong Kong Court of Appeal decision examined a creditor’s right to commence bankruptcy/insolvency proceedings where the petition debt arises from an agreement containing an exclusive jurisdiction clause in favour of a foreign court: Guy Kwok-Hung Lam v Tor Asia Credit Master Fund LP [2022] HKCA 1297.

This week’s TGIF considers Campbell J’s recent decision in Blackcitrus Pty Ltd (in liquidation) v Parramatta Rugby Club Limited [2022] NSWSC 1329, refusing to order security for costs and determining whether to strike out defences based on alleged past breaches of NRL salary cap rules.

Key takeaways

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

This week’s TGIF considers a recent decision of the Federal Court of Australia in which the Court relieved administrators of liability for entering a funding agreement with a major creditor in order to keep the company trading.

Key takeaways

This week’s TGIF considers the decision in Enares Pty Limited v Nimble Money Limited [2022] FCAFC 126, in which the Full Court considered shareholder information rights in the context of a dispute between Nimble’s board and its largest shareholder as to how to refinance Nimble’s debt.

Key takeaways