Tag Archives: insolvency

Decision of the German Court Causes Waves For Investors but is Welcomed by Creditors of Insolvent Companies

In September 2023, the insolvency administrator of the insolvent Wirecard AG began reclaiming dividend distributions for 2017 and 2018 from shareholders. This is following a judgment of the Federal Court of Justice (BGH) in March 2023 (BGH judgment of March 30, 2023 – IX ZR 121/22). In that judgment the BGH ruled that in the … Continue Reading

Germany leads the way with proposed legislation regulating crypto-assets safekeeping that will provide insolvency protection

The European Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114 – MiCA), which entered into force on 29 June 2023, is a significant new regulation that will impact the treatment of cryptocurrencies and digital assets. MiCA requires the European Securities and Markets Authority (ESMA) to develop a series of regulatory technical standards (RTS) and implement technical … Continue Reading

Are UK Restructuring Plans Still too Expensive?

As far as they go, restructuring plans have worked well since they were first introduced 3 years ago.  This is reflected in the most recent review of CIGA published by the Insolvency Service which reflects favourably on this new insolvency measure. However, there are still some barriers to its use. Not unsurprisingly costs are quoted … Continue Reading

Expected Changes to the UK Corporate Moratorium

The three year review of CIGA (the Corporate Insolvency and Governance Act) published by the Insolvency Service suggests that we might see changes to the corporate moratorium process – will these address concerns about the process and encourage more insolvency practitioners to recommend its use? The moratorium aims to protect companies from enforcement action to … Continue Reading

Are HMRC Critical To UK Restructuring Plans?

It’s now level pegging for HMRC on cram down –  twice it has been crammed down, and twice it has not. In the most recent restructuring plan proposed by Prezzo, the court sanctioned the company’s restructuring plan and crammed down HMRC as both preferential and unsecured creditor.  Unlike Houst’s restructuring plan, where HMRC was also … Continue Reading

(UK) Disclosure and Vote Swamping Revisted – Has the Position Changed following the Mizen CVA Appeal?

In two recent blog posts we discussed the challenge made to the Company Voluntary Arrangement (CVA) of Mizen Build/Design Ltd (the “Company”) by Peabody Construction Limited (“Peabody”) and the finding of (i) a material irregularity based on failure to disclose information to creditors in the CVA proposal, and (ii) unfair prejudice based on vote swamping. … Continue Reading

Can UK Administrators Apply For Conditional Discharge of Liability?

The court has recently confirmed that it does have jurisdiction to grant administrators a conditional discharge of liability but decided not to do so in the case of Re Central Properties Holdings Ltd (in administration) [2023].  In this blog we consider why the court refused to make that order and whether there are any circumstances … Continue Reading

(Australia) Debt Ceilings Apply Outside of the US

The uncertainty in markets continues as a result of a number of issues, including monetary policy, supply chain challenges, labour market constraints, increased creditor activities and a balance sheet reckoning post-COVID-19 where government support propped up unworthy businesses. That potentially debilitating economic cocktail is compounded by the fact that all entities have a debt ceiling, … Continue Reading

(UK) Pensions – A Pot to Play for?

The recent case of Re Lloyds British Testing Ltd [2023] is a reminder not to forget that in the right circumstances a director’s occupational pension pot might be a valuable source of funds that an Insolvency Practitioner (IP) can access to recover an unpaid debt due from a former director. Background In this case, an … Continue Reading

(UK) Avanti: The Evolution of a Spectrum – from Fixed to Floating Charge, who Needs Control?

In a decision likely to be welcomed by both debtors and lenders, the High Court has held that a charge granted by Avanti Communications Limited (“Avanti”) was properly characterised as a fixed charge (rather than a floating charge) notwithstanding that the chargor retained an element of control over the charged assets. A key plank of … Continue Reading

(UK) The Gloves are off for HMRC: What did we learn from the Great Annual Savings Sanction Hearing?

Yesterday saw the end of a three-day sanction hearing for the restructuring plan (the “Plan”) of the Great Annual Savings (GAS) company, with Justice Adam Johnson reserving his judgment and importantly, his decision on whether to exercise cross-class-cram-down to sanction the Plan for a later date. As we discussed in our recent blog, the Plan … Continue Reading

“It’s the principle of the thing”: HMRC fights back against UK Restructuring Plans

‘If, at first, you don’t succeed, then try and try again’ is a fitting description for HMRC’s recent approach to restructuring plans, with its opposition of plans proposed by The Great Annual Savings Company (GAS) and Nasmyth Group Limited (Naysmyth). The GAS sanction hearing (which is due to take place this week) will be the … Continue Reading

Australia’s External Administrators Are Afforded Significant Latitude

External administrators in Australia are faced with immediate challenges from the date of their appointment. Those challenges often come in the form of uncertainty around contractual positions, conflicting interests between key stakeholders and the administrators’ rights and obligations. Fortunately, the Insolvency Practice Schedule, which now forms a critical part of Australia’s Corporations Act, gives administrators … Continue Reading

Highland Capital Fails Bid to Recuse Presiding Judge (US)

In January, we wrote about Highland Capital Management, L.P. and the reorganized debtor’s filing of a petition for a writ of certiorari, by which the reorganized debtor asked the Supreme Court to consider whether section 524(e) of the Bankruptcy Code prohibits non-debtor exculpations.  Now for something completely different.  Earlier this month, the Bankruptcy Court for the … Continue Reading

(UK) Stripped and Outnumbered: Compromising Guarantee Claims in a CVA 

A company voluntary arrangement (CVA) is a tool which has been widely utilised by companies seeking to restructure and compromise liabilities. In recent years CVAs have been in the limelight because of attacks by landlords who feel that they have been unfairly prejudiced by the CVA terms.  Largely, challenges such as those to the Regis … Continue Reading

(UK) EBT Claims- Have Beneficiaries been Unjustly Enriched?

Can a liquidator run an unjust enrichment claim to seek to recover PAYE and NIC liabilities from a company’s directors arising from the company’s use of a “disguised remuneration” employee benefit trust (“EBT”) scheme? Based on the findings of ICC Judge Barber in the case of Re Ethos Solutions Ltd, the answer is “no”.… Continue Reading

Australian Insolvency Regimes Are Evolving Rapidly

The new year has seen a rapid pace being set in terms of anticipated and actual legislative, regulatory and common law changes across Australia’s restructuring and insolvency regimes. In our latest insight we flag potential changes to not only the legislative regime but also the regulatory framework and consider the outlook for key stakeholders.… Continue Reading

Restructuring Plans: A Final Lifeline for the UK Care Sector?

The challenges facing the care sector are not news to anyone. However, as we enter 2023, a sector which has historically operated on thin margins may be about to hit breaking point, with the number of insolvencies involving residential care businesses having increased by 59% in the last year alone. Is it possible to identify … Continue Reading
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