With continuing market volatility a number of companies remain under financial pressure. Businesses or individuals receiving payments from companies that might be financially distressed should be aware of the ability of a liquidator to apply to a court under the Corporations Act 2001 (Cth) (Corporations Act) to recover payments made to creditors in the six months prior to the appointment of a liquidator/administrator on the grounds the payment constituted an “unfair preference”.
Quick Recap on the Relevant Provisions
On 1 October 2015 the Insolvency (Protection of Essential Supplies) Order 2015 (“PESO”) will come into force. PESO aims to strengthen the statutory protection provided to insolvent companies and insolvency practitioners who need to utilise ‘essential supplies’ to continue to trade.
Essential Supplies
When a bankruptcy court ‘‘recharacterizes’’ debt, it causes something the parties have identified as debt to be converted into equity. Unlike an equitable subordination analysis, in which courts determine whether an acknowledged claim should be subordinated to that of other creditors due to a creditor’s inequitable conduct, a recharacterization analysis involves determining whether a debt actually exists.
On 26 May 2015 new UK insolvency law changes take effect and all insolvency practitioners and stakeholders should be aware of these amended rules which apply from today onwards. Read on to make sure you are up to date!
ECJ, Sixth Chamber, Judgment of 28 January 2015.
The judgment resolves the prejudicial question submitted by a Mercantile Court concerning the maintenance of workers’ rights in the event of the transfer of companies or part of them, and branches of business.
Health Warning: This Blog may not be historically accurate
If, like me, you have recently attended one of the many St Patrick’s Day parades that have taken place across the UK and worldwide, you are no doubt acutely aware that St Patrick was a polyester clad leprechaun with a penchant for drinking Guinness and turning rivers green. However, it may come as a shock to learn that St Patrick was also a dyed-in-the-wool insolvency litigator.
On December 19, 2014, the Governor of the State of Ohio signed into law legislation that clarifies and expands the scope of powers given to a receiver under Ohio’s receivership statutes (chapter 2735 of the Ohio Revised Code (“ORC”)). Most significantly, effective March 23, 2015 (the effective date for all of the amendments), an Ohio receiver will have express statutory power to sell real and personal property free and clear of liens and will
What does the crystal ball show regarding developments in the UK restructuring world in 2015?
1. Who will prosper: insolvency litigators or rogue directors?
Sophisticated distressed investors know the benefits of acquiring assets through a § 363 sale in a bankruptcy case. The primary benefit, of course, is acquiring assets free and clear of pre-existing liens, claims and interests. There are some occasions, however, where it is not practical for a buyer to request that a sale be run through a bankruptcy process, especially when the value of the assets and/or a sharp decline in the assets’ value does not justify the time and expense associated with a chapter 11 filing.
The Implications of the Willmott Growers Decision
On 4 December 2013 the High Court handed down its decision in Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed (In Liquidation)) [2013] HCA 51 (Willmott Growers case), clarifying the scope of a liquidator’s statutory power of disclaimer.