A cross-practice team led by partner Tom Astle has advised a syndicate of c.75 lenders under a bespoke €1.06bn super priority loan to distressed Croatian food producing and retail giant Agrokor (the “SPFA“) on an English law scheme of arrangement proposed by the company. The scheme of arrangement was approved by 97.92% in number of the lenders under the SPFA, representing 99.99% in value of scheme claims, at the creditors’ meeting earlier this week, and was sanctioned by Mr Justice Fancourt this morning.
Crown prerogative dates back to the Magna Carta entitling the monarch to absolute priority for revenue related debt. Come 6 April 2020 will we really be heading back to feudal times and 1215?
The proposal to reinstate Crown preference was announced as part of the Autumn Budget last year and came as a surprise to many. The expected consultation paper published by HMRC this week seeks the views of individuals, shareholders, directors, lenders, companies and insolvency practitioners on the proposal to reinstate Crown preference in part.
On 6 February 2019 the Court of Appeal gave its decision dismissing Sequana’s appeal against a decision of the High Court in 2016, that payment of a dividend by a company can be susceptible to challenge under section 423 Insolvency Act 1986 (IA86).
Background
In high stakes restructurings, directors can be under significant pressure from different parts of the capital structure to take (or refrain from taking) certain actions. It is critical that the board understands whether it owes duties to members or creditors (or both). For such an important issue, the law has previously been remarkably unclear.
On 1 March 2019 the Court of Appeal handed down judgment in First City Monument Bank Plc v Zumax Nigeria Ltd [2019] EWCA Civ 294, a decision which will provide welcome clarity to those engaged in international banking and the financing of international trade.
SUMMARY
The Court of Appeal of England and Wales (“CA”) made a significant ruling on two matters affecting the powers and duties of directors of English companies.
An old friend
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