The Court of Appeal has ruled that the previous decision of the High Court to sanction a restructuring plan ("Plan") that had been proposed by the Adler Group ("Adler") should be set aside. The decision marks the first appeal in relation to a restructuring plan under Part 26A of the Companies Act 2006 ("Companies Act") and the decision offers clarity on the approach to restructuring plans, particularly when considering issues of "fairness".

#1: Artificial Intelligence

The impact of artificial intelligence on the legal profession was a hot topic in 2023, with the English judiciary receiving guidance on the use of the technology. Debate on the role and regulation of AI is likely to continue throughout 2024, particularly as more specific applications are developed and demonstrated.

Under the Absolute Priority Rule, for a Chapter 11 plan to be confirmable, claims of a higher priority must be paid in full in order for lower priority claims to receive any recovery, and all creditors must be paid in full in order for equity interest holders to retain any interest in the debtor, or receive any distribution under the plan. The Absolute Priority Rule is embodied in Section 1129(b)(2) of the Bankruptcy Code.

In a landmark decision,[1] the Delaware Court of Chancery addressed, for the first time, the precise duties that a controlling stockholder owes, and the standard of review that will apply, when a controlling stockholder takes actions to block a board of directors’ desired course of action — such as by removing directors or enacting a bylaw requiring a unanimous vote for board action

The Corporate Insolvency and Restructuring Act, 2020 (Act 1015) introduced for the first time in the Ghanaian jurisdiction, cross-border insolvency proceedings. The cross-border insolvency proceedings aim to achieve among others, legal certainty for trade and investment, protection and preservation of investment and employment, fair and efficient administration of cross-border insolvencies that protect the interests of creditors and debtors and other interested persons.

Act 1015 provides for cross-border insolvency proceedings in instances where assistance is required,

Weiß ein Forderungsverkäufer von der Zahlungsunfähigkeit seines Schuldners, muss sich der Factor diese Kenntnis im Rahmen eines echten Factorings nicht allein deshalb zurechnen lassen, weil der Factoringvertrag Informations- und Unterstützungspflichten des Forderungsverkäufers vorsieht.

Überblick

The English Court of Appeal has today overturned the restructuring plan sanction order made by the High Court in April 2023.

The keenly awaited judgment raises some difficult issues for Adler in the context of its restructuring, but more broadly clarifies a number of points in relation to restructuring plans.

How the court uses its discretion to sanction a plan

Звернення до суду із заявою про відкриття провадження у справі про банкрутство — це комплексне і складне завдання. Заявникам у таких справах необхідно не лише враховувати положення законодавства, а й зважати на значну кількість суперечливих позицій, викладених у постановах Верховного Суду. Бар’єром, зокрема, може стати наявний підхід до категорії «спір про право» у справах про банкрутство.

You ship goods to a customer that is having financial difficulties. The customer sends you a check for the goods. What do you do?

Cash it and potentially be sued for a preference after the customer files for bankruptcy

or

Don’t cash it, and have a claim in the ensuing bankruptcy

Fiduciary Duties of Receivers

Receivers appointed to enforce a security owe their fiduciary duties to their appointor and not to the mortgagor. So, when realising the assets of the mortgagor, the receivers can focus their attention on pursuing that course of action which, as they judge it, is best calculated to optimise the position of their appointor; Salmon v Albarran [2023] NSWSC 1238 ("Salmon").