Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 27 countries that comprise the European Union, as well as the

collective viability of eurozone economies. Here we provide a snapshot of some recent developments relating to insolvency and restructuring in the EU.

PwC, the administrators in the Lehman Brothers administration in the UK, have made several applications to the Court seeking directions on their approach to the distribution of clients’ money and assets. On 29 February 2012 the Supreme Court gave judgment on issues that are central to the interpretation and application of the rules for the protection of client money made by the Financial Services Authority. The issues raised are ones that have divided judicial opinion.

Like many legal tests, the test for insolvency is easy to state, but hard to apply in practice.

The United Kingdom Supreme Court (UKSC)¹ has recently issued an important clarification, which confirms that an element of forwards projection must be applied – extending in extreme cases to assessments of balance-sheet as well as cash-flow solvency.

This liberal approach is likely to be followed in New Zealand, despite differences in statutory wording.

This appeal to the Supreme Court of the United Kingdom arose out of the insolvency and administration of the Lehman Brothers Group of companies.  Lehman Brothers International (Europe) (LBIE) was the principal European trading company in the group, and was authorised and regulated by the Financial Services Authority (FSA) prior to being put into administration in 2008.  This appeal (one of many involving the group) related to the provisions of the Clients' Assets Sourcebook issued by the FSA (CASS) that govern the basis on which client money is required to be held by regulated ent

The central question in Rubin v Eurofinance SA, [2012] UKSC 46, was whether the English courts ought to recognise the order or judgment of a foreign court to set aside transactions determined to be preferential or to have been at an undervalue, in circumstances where the defendant in the foreign proceedings was not present in the foreign jurisdiction or had not voluntarily submitted to its courts.

October 30, 2012 - The UK Supreme Court has released a decision that significantly impacts cross-border insolvency proceedings: Rubin v. Eurofinance SA and New Cap Reinsurance Corporation v. A E Grant [2012] UKSC 46.

What role does business common sense play in the interpretation of commercial contracts? This issue was recently addressed by the Supreme Court of the United Kingdom in Rainy Sky S.A. v. Kookmin Bank. The answer: “where a term of a contract is open to more than one interpretation, it is generally appropriate to adopt the interpretation which is most consistent with business common sense”. Since there is currently some uncertainty in Canada on the point, Rainy Sky is an important case to consider.

Decision

INTRODUCTION

The use of trusts for asset protection purposes is well established and – in principle – not improper. However, recent history has seen increasing attempts by creditors to have transfers of assets unwound. A recent UK Supreme Court case saw the Court effectively achieve this by way of a resulting trust finding.1 This article considers the issue from a different angle: insolvency legislation.

Last month the Insolvency Working Group released its second and final report, dealing with voidable transactions and Ponzi schemes.  The Group's first report was released in July 2016 and dealt with regulation of insolvency practitioners and voluntary liquidations.  In the second report, the Working Group make a number of recommendations on the voidable transaction regime and regarding protection from Ponzi schemes.  In relation to voidable transactions, the primary recommendations were repealing the "gave value" part of the defence available to creditors with a view to incre

If a transaction by a company amounts to an "unlawful distribution", and the company subsequently goes into liquidation, will an action for recovery of the benefits of that distribution, brought against the directors who authorised the transaction, be statute-barred if it is commenced by the liquidator of the company more than 6 years after the distribution was made?