Supply chain disruption was exacerbated by the pandemic, and due to the ongoing conflict in Ukraine problems continue to impact UK businesses. Unfortunately there is no sign of disruptions abating in the short term.
The saga of the first Ultra Petroleum Corp. chapter 11 cases appears to have finally come to an end. Numerous articles have been written on the tortured history of whether certain creditors of Ultra Petroleum are entitled to payment of their contractually mandated Make-Whole Amount and default rate of interest. The creditors’ quest for allowance of their claims has been up and back to the Fifth Circuit over the years and now, it appears that quest has reached a successful end with the October 14, 2022 decision of the Fifth Circuit in In re: Ultra Petroleum Corporation.
The High Court in Australia has determined that territorial limitations do not curtail group member participation rights in class actions. Read what this decision means in our latest Insight.
We look once again at the recent case of Re Active Wear Limited (in administration) (our other blog on another aspect of this case can be found here).
As part of the changes introduced in light of Covid-19, the Temporary Insolvency Practice Direction (MIPD) was introduced, to enable statutory declarations on notices of intention to appoint and notices of appointment of administrators to be sworn remotely, rather than having to be sworn physically in person.
In essence, what the MIPD does is say that any defect in process caused by administering a swear remotely does not invalidate the appointment, provided that the process set out in the MIPD is followed.
In Re Active Wear, the High Court ruled that despite the MIPD guidance not being followed, the appointment of administrators was valid.
Join SPB’s global chair of R&I Stephen Lerner and an esteemed panel of experts for an American Bankruptcy Institute (ABI) webinar addressing recent developments impacting formal and informal debt-restructuring procedures in the U.S. and Europe, practical issues for lawyers advising on cross-border debt-restructurings, key legal strategies regarding a cross-border debt-restructuring, and the role of management and directors involved in a restructuring exercise.
- Challenges facing companies involved in cross-border restructurings and bankruptcy proceedings;
- Key legal and regulatory developments that will affect cross-border restructurings and insolvencies going forward;
- Strategies for navigating the multiple legal systems and cultural differences that companies may face; and
- How multijurisdictional companies can prepare for cross-border restructurings and bankruptcy proceedings.
In a continuation of our Australian litigation funding series, Masi Zaki and Kate Spratt examine the recently announced reforms by the Australian government and the welcome relief for litigation funders, their investors and proponents in this insight.
The UK High Court has ruled that the obligations of third-party guarantors are not affected by a part 26A restructuring plan being sanctioned in respect of the underlying obligations. This approach mirrors the way guarantees are dealt with in a part 26 scheme of arrangement.
The case of Oceanfill Ltd. v Nuffield Health Wellbeing Ltd & Cannons Group Limited examined whether a restructuring plan under part 26A of the Companies Act 2006 (the “Act”) had the effect of releasing liability arising under a third-party guarantee.
The landlord was successful in its arguments that the original tenant and guarantor remained liable for guaranteed rent, despite the sanction of a part 26A restructuring plan which reduced the liability of their assignee, Virgin Active.
The court considered the possibility that in allowing claims against guarantors to proceed, so-called “ricochet” claims could surface against the plan company, which might have the ability to undermine the purpose of the restructuring plan. This did not alter the court’s decision to allow the landlord’s claim, however, it does raise the issue of how ‘ricochet’ claims might be dealt with in future plans – see our further comments on this below.
Following a long wait of 18 months, the Supreme Court has today confirmed that the appeal of the decision in BTI –v- Sequana is unanimously dismissed.
The key question that many of us have been waiting for the answer to is: Does the creditor duty set out in s172(3) of the Companies Act 2006 exist and if so, when is it engaged?
The Supreme Court has refused permission for the case of Lock v Stanley to be appealed, meaning that the Court of Appeal’s approach to questions around the assignment by a liquidator of claims in the insolvent estate stands.
Most notably the Court of Appeal confirmed that a liquidator is under no duty to offer defendants the right to acquire the claims against them unless the failure to do so would be perverse.
For full details of the case and commentary about the Court of Appeal judgment see our previous blog.
In the recent case of Re Active Wear Limited (in administration), the High Court ruled that the purported out-of-court administration appointment by a sole director of a company with unmodified model articles, was valid notwithstanding the earlier High Court decision in Re Fore Fitness Investments Holdings Ltd  EWHC 191 (Ch). We have set out below to what extent this new case law clarifies the parameters within which a sole director can place a company into administration.