You must have been in isolation if you haven’t heard or read about the Supreme Court’s decision in Bresco v Lonsdale. It has been hailed by some as opening the floodgates to adjudications by insolvent companies. But as a series of recent judgments show, there remain a number of obstacles that will need to be overcome by insolvent entities seeking to enforce an adjudication award.

The background

On January 17, 2020, Justice Romaine of the Alberta Court of Queen’s Bench found that the Alberta Securities Commission’s (the “ASC”) administrative penalties against Theodor Hennig (“Hennig”) survived Hennig’s discharge in bankruptcy. This decision marks the first time a Canadian court has considered securities regulatory penalties within the context of subsection 178(1) of the Bankruptcy and Insolvency Act (the “BIA”).

The UK Supreme Court recently handed down judgment in Pimlico Plumbers v Smith1, the latest decision on the hot topic of employment status in the “gig economy”, following the Deliveroo and CitySprint cases in 2017. The court dismissed Pimlico's appeal, holding that the employment tribunal was entitled to find that Mr Smith, who was engaged under a contract describing him as a self-employed plumber, was in fact a worker. He may now proceed with claims of disability discrimination and for unlawful deductions and holiday pay.

In the first case of its kind, the High Court in England has prevented a shareholder from splitting its shareholding in an attempt to defeat the approval of a scheme of arrangement under section 895 of the Companies Act 2006 (Scheme) by way of manipulation of legislative requirements in relation to Schemes which require approval by a majority in number representing 75% in value of the voting class of shareholders.

In Austcorp Project Number 20 Pty Ltd v The Trust Co (PTAL) Limited, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (in liq) [2015] FCA 850, the Federal Court of Australia had to determine whether to dismiss the proceedings for failure to comply with previous orders for security for costs, or vary those orders for security. The basis upon which the Court made the orders for security in the first place is set out in Austcorp Project Number 20 Pty Ltd v LM Investment Management Ltd [2014] FCA 1371, and was canvassed in an ear

A recent Federal Court of Australia decision has granted the Australian Commissioner of Taxation the right to recover, from a failed foreign company’s Australian assets, the pari passu amount the Commissioner would have been entitled to receive (on account of outstanding domestic tax and penalties) if he had been allowed to prove in the liquidation before the assets are remitted to the company’s foreign representatives (the liquidators). 

On Friday, 29 July the Minister for Enterprise, Trade and Employment signed into law the European Union (Preventive Restructuring) Regulations 2022 (the Regulations).

On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act of 2021 (CAA), the omnibus funding bill that makes consolidated appropriations for the fiscal year ending September 30, 2021. The CAA also provides various forms of economic relief to address the effects of the COVID-19 pandemic.

As part of its coronavirus response, the CAA includes a number of amendments to the Bankruptcy Code. The key amendments are addressed below.

Temporary statutory protection of certain arrearage repayments under forbearance arrangements

The Corporate Insolvency and Governance Act 2020 makes the most significant changes to UK insolvency law in a generation. The Act introduces three permanent measures: a new free standing moratorium, a new restructuring plan process (largely modelled on schemes of arrangement but with the addition of a cross-class cram-down), and restrictions on termination of contracts for the supply of goods and services. The moratorium and the restructuring plan are of particular significance to secured lenders, and this note addresses some of the most frequently asked questions by the ABL community.

As the name suggests, the UNCITRAL Model Law on Cross-Border Insolvency 1997 (Model Law) seeks to address complexities caused where insolvencies cross borders, while leaving substantive insolvency laws of each country largely unaltered. However, as jurisdictions continue to adopt and interpret the Model Law, inconsistencies in its application are coming to light.