Archives: EME & Asia Bankruptcy & Commercial Restructuring

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No intention? No notice!

In a judgment that will undoubtedly impact what has become fairly common practice when filing notices of intention to appoint an administrator (“NOITA”), the Court of Appeal has held in JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd[1] that a company seeking to give notice of intention to appoint under paragraph 26 … Continue Reading

Insolvency Rules 2016: Decision Making

The Insolvency Rules 2016 (the 2016 Rules) have effect from 6 April 2016. A key change introduced by the 2016 Rules is a new approach to decision making, including a deemed consent procedure. The new approach is designed to ease the administrative and cost burden in insolvency proceedings, and is summarised here: Insolvency Rules 2016: … Continue Reading

Can We Work It Out? : An Overview of the Pre-Action Protocol for Debt Claims

After much consultation and debate, the Ministry of Justice has published the final version of the Pre-Action Protocol for Debt Claims (the Protocol), which is due to come into force on 1 October 2017. The Protocol is available on the Ministry of Justice website. Following the general trend of civil procedure in the UK, the … Continue Reading

Rights of Third Parties Put on Notice of Freezing Orders – A Clarification from the Court

Reed Smith recently released a client alert regarding a decision this week, in which the English High Court has clarified the extent of a third party secured creditor’s duties, when put on notice of a freezing order, and suggested a more limited duty than that previously articulated by the court. Notwithstanding this, the position remains … Continue Reading

Permission to continue proceedings during a statutory moratorium – South Coast Construction Ltd v Iverson Road Ltd [2017] EWHC 61

The recent case of South Coast Construction provides a helpful insight into the court’s treatment of applications for permission to continue proceedings during the administration moratorium. Mr Justice Coulson heard the matter whilst acknowledging that, by the time judgment was handed down, the interim moratorium (which had arisen following the filing of a notice of … Continue Reading

Au revoir bailiff notifications for the assignment of receivables

Starting on October 1st , 2016 the French law on receivable acquisition has changed to become simpler. Before, a formal bailiff’s notification was required in order to render a receivable acquisition enforceable towards the debtor of such receivable. Now a mere notification will achieve the same result. If no special form is imposed upon such … Continue Reading

Default interest gets washed out of the waterfall

The degree to which certain elements of a recovery right under a contract, including a debt instrument, are assignable or transferable to a third party has been questionable under English law for some time. “Litigation rights” are one example. Many English legal practitioners regard litigation rights as personal rights, and personal rights are by their … Continue Reading

Court of Appeal considers the treatment of contingent assets in balance sheet test

Evans v Jones [2016] EWCA Civ 660 Executive Summary The Court of Appeal recently considered an appeal from the liquidators of a property development company which went into creditors’ voluntary liquidation. The company had made an unlawful dividend to its shareholders and the Court of Appeal considered whether the unlawful dividend should be treated as … Continue Reading

UAE Bankruptcy law

Currently in the UAE, laws related to insolvency are unclear. Companies face harsh penalties in a bankruptcy scenario, and individuals can face criminal sanctions and penal sentences. However, a new bankruptcy law drawing from international best practice is expected to come into force in early 2017, in the wake of low oil prices since 2015. … Continue Reading

A lifeboat with conditions: new guidance from the PPF

The Pension Protection Fund (“PPF”) has updated its approach to employer restructuring guidance and its general guidance for restructuring and insolvency professionals. These documents set out certain criteria that should be met when making proposals to the PPF in respect of a sponsoring employer suffering an insolvency event. 1. The PPF Approach to Employer Restructuring: … Continue Reading

Court decides to ‘wait and see’ in its refusal to grant an administration order

Rowntree Ventures Ltd v Oak Property Partners Ltd [2016] EWHC 1523 (Ch) Executive Summary The High Court recently re-affirmed the discretionary nature of its right to grant an administration order. In this case, the court refused to grant an administration order even when it determined that the companies were insolvent and the statutory purpose of … Continue Reading

German Federal Court Ruling Important for Future Contractual Netting Arrangements

In a decision of 9 June 2016, the German Federal Court of Justice (Bundesgerichtshof, “BGH”) has ruled that the determination of the close-out amount in a netting provision based on the German Master Agreement for Financial Derivatives Transactions (Rahmenvertrag für Finanztermingeschäfte or DRV) is not legally effective in the event of insolvency to the extent … Continue Reading

Modeling the Model Law – what not to do

OGX Petroleo E Gas S.A., Re [2016] EWHC 25 (Ch) In a recent judgment, Mr Justice Snowden sounded a cautionary note for applicants seeking recognition of a foreign insolvency proceeding under the UNCITRAL Model Law, advising applicants to make full and frank disclosure to the court in relation to the effect that such recognition might … Continue Reading

To submit or not to submit – questions of jurisdiction

This appeal arose out of the litigation fallout from the Bernard Madoff Ponzi scheme. In the appeal, the Privy Council considered whether, at common law, an agreement to submit to jurisdiction must be express or whether it could be implied or inferred. The Board of the Privy Council found that an agreement to submit to … Continue Reading

Collective redundancies – can directors of financially distressed companies breathe a sigh of relief?

In October we issued an article on the criminal charges that had been brought against the former directors of City Link Limited (in administration) for their failure to notify the Secretary of State of proposals for collective redundancies under section 193 of the Trade Union and Labour Relations (Consolidation) Act 1992. This section applies where an … Continue Reading

Extra-territorial effect of section 236 – the debate continues

Re Omni Trustees Ltd (In Liquidation) [2015] EWHC 2697 (Ch) In an interesting judgment, the High Court in Manchester has decided not to follow the ruling from earlier this year of Mr Justice Richards in Re MF Global (UK) Ltd[1], deciding instead that section 236 of the Insolvency Act 1986 (the “Act”) does indeed have … Continue Reading

Wrongful Trading: Robin Hood’s not-so Merry Men

Brooks and another v Armstrong and another [2015] EWHC 2289 (Ch) In a rare judgment considering wrongful trading in detail, the memorably-named “Robin Hood” case considers at which point the directors ought to have known that there was no reasonable prospect that the company would avoid going into insolvent liquidation. It also reiterates that the … Continue Reading

Prohibitions on Restrictions to Assignment of Receivables

Many businesses assign or charge their receivables in order to obtain finance, and in many cases, to improve cashflow. Following the financial crisis of 2008, alternatives to bank-led finance have been sought by businesses, with the government making efforts to facilitate access to alternative finance. Commercial contracts often contain provisions prohibiting the assignment of payment … Continue Reading

Brazil, bribes and backward tracing – only in Jersey

The Municipality of Sao Paulo and the Republic of Brazil successfully defeated an appeal from two BVI registered companies to the Privy Council which considered what the circumstances are, if any, where backward tracing would be permitted. Background The two appellants, “Durant” and “Kildare” are BVI registered companies, which were controlled by Mr Paulo Maluf … Continue Reading

Section 236 of the UK Insolvency Act 1986 – extra-territorial effect?

The English High Court rejects an application by the Joint Special Administrators of MF Global UK Limited (“MF Global”) for an order seeking the production of documents pursuant to section 236 of the Insolvency Act 1986 (the “Act”). In doing so, Mr Justice David Richards rules that section 236 of the Act does not have … Continue Reading

French Supreme Court rules out liability for undercapitalising companies

In this article, Anker Sorensen, a senior partner of the Financial Industry Group of Reed Smith in Paris, practicing predominantly in the area of Corporate and Restructuring, discusses two recent decisions rendered by the Commercial chamber of the French Supreme Court. One of the decisions seems to set a standard for the lower courts when … Continue Reading
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