Force majeure clauses and the doctrines of impossibility and/or impracticability remain among the most-discussed legal topics of the COVID-19 pandemic. Courts across the country, finally open, are grappling with those issues and giving some insight as to how these topics may play out in future cases.
Facts
Snowden J heard two applications for injunctions to restrain the presentation of two winding-up petitions, against Saint Benedict's Land Trust Limited (SBLT) and Shorts Gardens LLP (SG), respectively. The respondent creditors were Camden and Preston councils in relation to unpaid liability orders in respect of NNDR (National Non Domestic Rates) and other unpaid costs orders.
The Corporate Insolvency and Governance Bill (the "Bill") was published on 20 May 2020. The Bill introduces a new type of ‘moratorium’ whereby eligible companies can take 40 days to restructure without the threat of enforcement action from creditors.
Suppliers of goods often rely upon retention of title clauses to preserve their goods in the event the purchaser defaults on any aspect of the supply agreement. However, how enforceable are these provisions when the purchaser enters into administration or liquidation or becomes bankrupt? What steps can suppliers take to protect their interests in these circumstances?
In a case that is sure to keep lawyers talking for months, the Supreme Court has decided the important case of Bresco Electrical Services Ltd (In Liquidation) v Michael J Lonsdale (Electrical) Ltd.
The case concerns the relationship between the statutory adjudication and insolvency set-off regimes.
The initial wave of post-COVID Chapter 11 business bankruptcies has revealed an increasing tendency for senior executives of financially distressed companies to award themselves substantial bonuses and similar forms of compensation immediately before placing their companies into bankruptcy. If this trend continues, it may largely nullify the efforts of Congress and the courts to rein in and strictly regulate such forms of compensation.
In einem Entscheid vom 5. Mai 2020 hat ein Zürcher Bezirksgericht gleichzeitig mit der Gewährung einer provisorischen Nachlassstundung die Übernahme einzelner Betriebsteile der Schuldnerin als sogenannte pre-pack Transaktion genehmigt. Das Instrument des "Pre-pack", bei dem ein Verkauf von schuldnerischen Vermögenswerten vor, aber im Hinblick auf ein nachfolgendes Nachlassverfahren vorbereitet wird, ist in der Schweiz noch wenig verbreitet.
Par décision du 5 mai 2020, un tribunal de district zurichois a approuvé la reprise de parties d'une entreprise d'une débitrice sous forme d'une transaction dite de « pre-pack » (préemballage), simultanément à l'octroi d'un sursis provisoire. L'outil du « pre-pack », dans lequel la vente des actifs du débiteur est préparée par avance, en vue d'une procédure ultérieure de sursis concordataire, est encore peu utilisé en Suisse.
It has long been the law that termination of contracts is permissible under the Companies' Creditors Arrangement Act (CCAA) and Bankruptcy and Insolvency Act (BIA) with the effect of the termination being to create an unsecured claim for damages in place of the contract. What has not been permitted is allowing insolvent companies to pick and choose parts of an agreement to terminate. Following a recent decision arising out of receivership proceedings in the Yukon, it may now in some circumstances be possible to terminate parts of an agreement.
Introduction