This week’s TGIF considers an appeal to the Full Court of the Federal Court for the termination of a deed of company arrangement , in circumstances where the appellants argued that liquidation of the company would provide a better return to creditors.

Key takeaways

In a recent virtual speech, Chair of the FCA, Charles Randell observed that some of the debt businesses have incurred in the Covid-19 crisis will become unaffordable and that lenders and regulators will need to tackle this overhang of debt quickly and fairly to prevent it becoming a drag on the economy. With an eye to the past, Mr Randall noted that the industry could not repeat the events of the 2008 crisis where the treatment of some SME customers caused serious damage to the trust in financial services institutions and in some cases to customers themselves.

Ability of a debtor to assume, assign, or reject oil and gas “leases” under section 365 of the Bankruptcy Code

Since the start of the COVID-19 pandemic in early 2020, commercial activities worldwide have been hit hard. It is especially difficult for businesses already affected by changes in the economic environment and consumption pattern. While waiting for the pandemic to alleviate and business activities to recover, the number of companies seeking bankruptcy protection or reorganization has increased each month.

As per Section 60 (5) (c) of the Insolvency and Bankruptcy Code (IBC), the jurisdiction of matters, inter alia, pertaining to Intellectual Property infringement by a corporate debtor is vested with the National Company Law Tribunal (NCLT) which is empowered by the IBC to entertain and dispose off any question of priorities or any question of law or fact, arising out of or concerning the insolvency resolution for liquidation proceedings. 

Different countries frame the exact description of the role of directors of a company in different terms. One feature is common to all – the obligation not to continue trading if a company is insolvent. Again, the detailed implications of doing so vary from one jurisdiction to another. However, this obligation not to continue wrongful trading is at the heart of trust in a market-based economic system.

Earlier in March and prior to Covid-19 taking over both the world and the legal world, Mr Justice Snowden handed down his judgment in Bilta (UK) Limited (in liquidation) et ors v (1) Natwest Markets PLC and (2) Mercuria Energy Europe Trading Limited [2020] EWHC 546 (Ch) in which he found both RBS (as defined below) and RBS SEEL (also as defined below) liable for dishonest assistance and knowingly being a party to fraudulent trading. As demonstrated below, the judgment contains a number of cautionary lessons for both banks and traders alike.

Objection to IRS Proof of Claim, Filed Before Amendment to Rule 3007 Went Into Effect, Was Properly Mailed Only to IRS

The U.S. Court of Appeals for the Sixth Circuit recently held that wages withheld as a voluntary 401(k) contribution prior to filing bankruptcy were not considered “disposable income” under a Chapter 13 bankruptcy plan.

A copy of the opinion in In re Camille Davis is available at: Link to Opinion.

An individual debtor (“consumer”) filed a Chapter 13 bankruptcy with more than $200,000 in debt ($189,000 unsecured debt) and fewer than $39,000 in assets.

As we attempt to mitigate the potential effects of the COVID-19 pandemic on our global supply chain, stakeholders should be actively considering downstream impacts. In this current environment, considering prospective internal and external bankruptcy and restructuring threats may be more important than ever.