On 9 November 2017, in a rare example of a contested recognition hearing, His Honour Judge Paul Matthews granted recognition of Agrokor’s extraordinary administration (EA) as a foreign main proceeding under the Cross-Border Insolvency Regulations 2006 (CBIR).

This case involved an application for security for costs against Mr Nogotkov who is, or claims to be, the Liquidator appointed by a Russian court of Dalnyaya Step LLC ("DSL").

Billed as INSOL’s “most popular session”, the plenary session Hot Topics – Avoid Being Burnt! provided a brief overview of developments in the insolvency landscape. The session panel was chaired by Jay A. Carfagnini (Goodmans LLP) with panelists the Honourable Justice Paul Heath of the High Court of New Zealand, Gabriel Moss QC, Gaurav Malhorta (Ernst & Young), and Jason Karas (Lipman Karas).

The panel discussed the following points:

The English Court granted recognition of Chapter 11 proceedings in relation to a company that was incorporated in the UK but had its centre of main interests ("COMI") in the United States, confirming that the Directors were foreign representatives for the purpose of the Cross Border Insolvency Regulations 2006 ("the Regulations").

The English Court has agreed to lift the automatic stay on proceedings under the Cross Border Insolvency Regulations 2006 (“CBIR”) against STX Offshore & Shipbuilding Co Ltd (“STX”) which had entered into rehabilitation proceedings in Korea.

Facts

The latest development in what has been a long-running (and expensive) cross-border insolvency proceeding involving Nortel (see our June 2015 and September 2015 legal updates for previous instalments) is a settlement between:

Key points

• Automatic stays on proceedings are imposed by Article 20 of the UNCITRAL Model Law (and mirrored in s.130(2) IA 1986)
• The case reinforces the principle that automatic stays are designed to avoid the unnecessary expenditure of assets otherwise available for distribution amongst creditors

The facts

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Background

Administration

Administration is a procedure by which a company can be reorganised and its assets realised whilst being protected by a moratorium from actions brought by creditors (explained below).  

Objectives

A company can be put into administration if the objectives of administration are likely to be achieved. These are set out in the Insolvency Act 1986 (the “Act”)4 as:  

On December 21, ISDA announced that it sought and was granted permission to intervene in the Lehman Brothers International Europe case in order to ensure that the arguments reflecting the market's interpretation of Section 2(a)(iii) of the ISDA Master Agreement were made before the court. The court agreed with ISDA that Section 2(a)(iii) is "suspensive" in effect. ISDA Release.