Good evening.
Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of March 7, 2022.
In Ernst & Young Inc. v. Aquino, the court upheld the application judge’s decision to grant the orders the Bondfield monitor and trustee in bankruptcy requiring payments made at undervalue to be repaid. In coming to its decision, the Court applied the corporate attribution doctrine.
OVERVIEW
Jeremy Richmond QC and Benjamin Joseph contributed to the R3 Members' Magazine for their Case Summaries section. This was first published in the Winter 2021 edition of Recovery.
Andrew v. Kingsway Asset Finance
今回のニュースレターでは、2022 年１⽉の破産倒産法関連の主なアップデートについて取り扱ってい ます。最⾼裁判所（＝SC）、会社法上訴審判所（＝NCLAT）、会社法審判所（＝NCLT）にて下された 重要な判決についてまとめました。 1) ADVANCE EXTENDED BY A DIRECTOR TO THE COMPANY IS A FINANCIAL DEBT Matter: Mrs. Jayanthi G. Ravi v. Chemizol Additives Pvt. Ltd. Order dated: 03 January 2022 Summary: 本件は、Chemizol Additives Pvt. Ltd. （＝Chemizol）の元取締役である Jayanthi G. Ravi （＝債権者） が、Chemizol への融資を巡り、破産⼿続きの開始を NCLT に求めたものです。NCLT は、融資⾦額が⾦ 融債務であるか否かが明確でないという理由で、申⽴てを棄却しました。Chemizol と債権者の間にロー ン契約が存在せず、取締役会や株主の事前承認が得られていないことも論点の 1 つでした。当該 NCLT の命令に対して、異議が唱えられました。
Our recent updates have explained the rise in instances of fraud and the civil litigation options open to victims of fraudulent conduct.
Lock-up agreements typically involve the company's creditors committing in advance to vote at the relevant class meeting in favour of the contemplated scheme. Lock-up agreements serve an important commercial purpose of either securing support or giving an indicator as to likely support for the scheme before the parties incur the time and expense in finalising the negotiation process of the scheme.
The UK High Court has excluded 'out of the money' creditors and shareholders from voting on Smile Telecoms Holdings Limited’s (Smile) restructuring plan because they did not have a genuine economic interest in the company.
Background
ASIC v King [2021] FCA 1610
Background
Under German insolvency law, a company is over-indebted when its existing assets do not fully cover its debts and there is no positive going concern prognosis. A positive going concern prognosis is assumed if the company has sufficient liquid funds available for a certain period to satisfy all liabilities at maturity and its profitability will be restored in accordance with a business plan.
Recent court decisions and legislative clarification
Over-indebtedness remains a ground for insolvency
In the landmark decision in case (2021)粤03认港破1号(2021) Yue 03 Ren Gang Po No. 1 (Shenzhen Court Decision), the Shenzhen Intermediate People’s Court (Shenzhen Court) ordered formal recognition in Mainland China of liquidators appointed by the Hong Kong Court of First Instance (Hong Kong Court) over Samson Paper Company Limited (Company) to permit the liquidators to exercise powers over the Company’s assets located in Mainland China.
Claims are “impaired,” unless the plan “leaves” their rights “unaltered.”§ 1124(1).
This rule is not as simple and unequivocal as it seems, according to an In re Hertz opinion. [Fn. 1] Here’s why.
Plan Treatment of Unsecured Claims
Claims of unsecured creditors in the Hertz bankruptcy are treated, under its Chapter 11 Plan, as follows: