FI and D&O Since our last update, there have been significant developments in the FI and D&O landscape. November saw the first ever UK deferred prosecution agreement (DPA) announced between the SFO and Standard Bank. The DPA process has been available but unused since 2014 so the judgment and the SFO’s comments thereafter provided some much needed guidance on what the process involved. Significantly, weight was placed on Standard Bank’s early self-reporting and cooperation.
Vizcaya Partners Limited v Picard and another [2016] UKPC 5
Privy Council advice that addresses what is required for foreign judgements
Simona Kornhaas v Thomas Dithmar (Case C-594/14)
The ECJ have ruled that a director of an English company that had entered into insolvency proceedings in Germany is liable to reimburse the company under German law for payments made after the company became insolvent.
Edgeworth Capital Luxembourg Sarl (2) Aabar Block Sarl V Glenn Maud [2015] EWHC 3464 (Comm)
The High Court in England has ruled on whether Spanish Law has the effect of extinguishing third party guarantees when the beneficiary of the guaranteed liabilities enters into insolvency proceedings in Spain.
On 25 July 2014 and 17 September 2014 respectively, Justice Brereton of the Supreme Court of NSW delivered two related judgments in Re AAA Financial Intelligence Ltd (in liquidation) andRe AAA Financial Intelligence Ltd (in liquidation) (No 2). The decisions deal with the evergreen topic of Liquidator remuneration and expenses.
Importantly, in fixing the Liquidators' remuneration, Justice Brereton adopted a "value" focussed approach, and discussed the relevance of considering matters beyond simply time spent multiplied by fixed hourly rates.
The ability of limited recourse provisions to protect borrowers and financiers against insolvency risks may be weaker due to a recent English court case.
Limited recourse clauses are often used in project and structured finance transactions. Borrowers want to avoid the risk of their directors being liable for trading while insolvent; and financiers may want to avoid the possibility of insolvency clawback actions if they seek to enforce their security documents.
In Madsen-Ries v Rapid Construction Ltd [2013] NZCA 489, the Court of Appeal considered an appeal concerning a liquidator's attempt to have a payment set aside.
The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 (Regulations) to amend the structure of UK annual reports have been published and laid before Parliament.
The Financial Reporting Council (FRC) and institutional bodies have published the following guidance in relation to corporate governance and directors' remuneration in the last few months.
Introduction
The immediate focus for Britain’s authorities when dealing with the COVID-19 pandemic has been, quite rightly, to secure the best possible health outcome for the greatest number of people.
Subsequently, following a wave of concern regarding the best way of maintaining the financial status-quo for (i) businesses, (ii) employees, and (iii) individuals, the UK government announced an unprecedented series of assistance programmes, designed to counter the impact of previously unknown, and unquantifiable, distress.