In April 2018, the United States Supreme Court approved rule changes to both the Federal Rules of Civil Procedure (the Civil Procedure Rules) and the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). The rule changes became effective on December 1, 2018. While the modifications are not as monumental as those made in previous years, one set of changes, focusing on electronic service, will certainly impact the day-to-day practice for bankruptcy professionals.

It looks like 2019 won't be the new start many had hoped for. With large high street retailers already teetering on the edge after a disappointing Christmas and the government still up in arms about the B word, the country's commercial real estate market is looking more and more uncertain.

Introduction

In light of the decisions made in the case of BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112 (the Sequana case), consideration may need to be given to the interests of creditors when declaring a dividend. The Court of Appeal in the Sequana case concluded that the payment of an otherwise lawful dividend constituted a transaction defrauding creditors under section 423 of the UK’s Insolvency Act 1986 (IA 1986).

Background to the Sequana Case

A copy of the judgment can be found here.

Introduction 

1. The bank successfully appealed an order refusing to give or reserve judgment after hearing full submissions in the bank’s petition and instead listing the petition for hearing at the same time as two later-in-time petitions to bankrupt the debtor.

The Background

Service area / Restructuring and Insolvency

Location / British Virgin Islands

Date / February 2019

This article considers how to challenge an act, omission or decision of an office-holder.

The right to bring a challenge derives from Section 273 of the BVI Insolvency Act 2003, which provides:

A person aggrieved by an act, omission or decision of an office holder may apply to the Court and the Court may confirm, reverse or modify the act, omission or decision of the office holder.

There are limits on the ability of shareholders to ratify dubious acts of the directors – it cannot be effective if the interests of existing creditors have become paramount (so as to subordinate the duties owed to shareholders) and are prejudiced. This is particularly relevant to upstream guarantees. On 6th February, the Court of Appeal gave its 51-page judgment in BTI 2014 LLC v Sequana S.A which is relevant to exactly this point.

A number of interesting cases relating to professional indemnity insurance passed through the courts in 2018, and this article looks at four of them.

Euro Pools plc (in Administration) v RSA [2018] EWHC 46 (Comm)

Kicking the year off was the Euro Pools decision in January 2018.

The insured specialised in the design and installation of swimming pools. The products that were the source of this dispute were the movable swimming pool floors and the vertical booms that enabled division of the pool.

Court confirms dividends can be transactions at an undervalue

The Court of Appeal has confirmed that a dividend paid by a company to its shareholders can constitute a transaction at an undervalue under insolvency law.

What happened?

[2019] EWCA Civ 27

Restructuring & Insolvency analysis: Following the decision in Wagner v White, Connor Pierce, solicitor at Ashfords LLP, looks at how the courts have been dealing with bankruptcy petitions which lenders have presented against guarantors when the principal borrower fails to repay the loan. Pierce also considers the ways in which guarantors have tried to have the lender’s statutory demand set aside. Wagner v White [2018] EWHC 2882 (Ch), [2018] All ER (D) 16 (Nov)