Zone of Insolvency

Zone of Insolvency

Federal Court deems Halifax a “classic candidate” for cross border insolvency cooperation

By Mark Schneider (AU) on Posted in Administration

On August 22, 2019, Justice Gleeson delivered her judgment in Re Halifax.

Halifax Australia (Halifax Aus) owned and operated a number of Halifax investment services companies operating under the Halifax name in various locations around the world.

In late 2018, liquidators were appointed to Halifax Aus. At the time, Halifax owned 70% of Halifax New Zealand (Halifax NZ).

As a part of business operations, funds were transferred between Halifax Aus and Halifax NZ on an “as needs basis”. A majority (95%) of the funds held on trust by the Halifax group were affected by commingling. … Continue Reading

Supreme Court settles trademark Circuit split

By Samuel Kohn (US), Susan Ross (US), Bandar Al-Saif (US) and Joy Wang (US) on Posted in US

On May 20, 2019, the US Supreme Court ruled that a licensor’s rejection of a trademark license in bankruptcy does not terminate the licensee’s right to continue using the licensed mark. Mission Product Holdings Inc. v. Tempnology LLC, 587 US __ (2019). The decision brings trademarks into alignment with how patents and copyrights are already treated under the Bankruptcy Code.

Samuel Kohn, Susan Ross, Bandar Al-Saif and Joy Wang have provided a briefing.… Continue Reading

The Corporations Amendment (Strengthening Protections for Employee Entitlements) Act 2019 commenced April 6, 2019

By Natasha Toholka (AU) and Cassie Mortimer (AU) on Posted in Australia

Australia has a taxpayer funded scheme which guarantees employee entitlements arising out of liquidation up to statutory caps. It is known as the Fair Entitlements Guarantee Scheme (FEG). The Australian Government has become concerned that questionable practices which rely on FEG to avoid employee entitlement obligations, such as illegal phoenixing, are on the rise and imposing significant costs on FEG and therefore, the Australian taxpayer. The Government has introduced legislative amendments to facilitate the effective recovery of entitlements from parties which take part in these questionable practices.… Continue Reading

UNCITRAL draft Model Law on Enterprise Group Insolvency

By Scott Atkins (AU), John Martin (AU) and Sophie Hewitt (AU) on Posted in Australia

In December 2018, UNCITRAL Working Group V (Insolvency Law) held its 54th session in Vienna where it discussed, among other topics, cross border insolvency of enterprise groups. These discussions included amendments to the Enterprise Group Insolvency: Draft Model Law (‘draft Model Law’) and the Enterprise Group Insolvency: Guide to Enactment of the Draft Model Law (‘draft Guide to Enactment’). The Working Group began drafting the Model Law after agreeing to the UNCITRAL mandate in December 2013.… Continue Reading

Opposing the National Bankruptcy Conference’s proposal to legislatively repeal Fairfield Sentry

By Howard Seife (US), Andrew Rosenblatt (US) and Francisco Vazquez (US) on Posted in US

On August 20, 2018, the National Bankruptcy Conference (the “NBC”), a group of bankruptcy judges, professors, and professionals that has consulted with Congress on the drafting of the U.S. Bankruptcy Code, sent a letter to Congress proposing a series of amendments to Chapter 15, which governs the process for obtaining recognition of a foreign insolvency or restructuring proceeding in the U.S. … Continue Reading

English Court of Appeal affirms application of the “Gibbs Rule” in a cross-border restructuring

By Scott Atkins (AU) and Francisco Vazquez (US) on Posted in Australia, US

Under the English common law rule known as the “Gibbs rule,” a contractual obligation can be changed or discharged only in accordance with the law governing that obligation. Consequently, a debt governed by English law may not be discharged in a foreign insolvency or under a foreign restructuring plan unless the creditor submits to the foreign insolvency proceeding or consents to the plan. Earlier this week, the Court of Appeal of England and Wales affirmed the application of the Gibbs rule in a case under the Cross-Border Insolvency Regulations 2006 (“CBIR”), Great Britain’s version of the UNCITRAL Model … Continue Reading

High Court of Australia rules that “holding” deeds of company arrangements are valid

By Jeffery Black (AU) and Nicole Schaillee on Posted in Australia

BVI based creditor – Mighty River International Limited – challenged the validity of a “holding” deed of company arrangement (or a ‘holding DOCA’) approved by creditors of Australian miner Mesa Minerals Limited (Company). … Continue Reading

Will Singapore become an international center of debt restructuring?

By Tim Mornane on Posted in Australia

Singapore has set its sights on becoming an “International Center for Debt Restructuring”, approaching the status of London and New York.

Key to achieving that goal, in 2017 Singapore enacted the Companies (Amendment) Act 2017 which effected major legislative changes to restructuring provisions of the Singapore Companies Act (Cap 50) 2006 (referred to hereafter as the “Companies Act”). That legislation has been followed by further reforms with the passage of the Insolvency, Restructuring and Dissolution Act 2018 (which passed parliament on 1 October 2018).… Continue Reading

Claims against IPs: the rising tide

By Helen Fairhead (UK) on Posted in Europe

The role of an IP has always been challenging – taking control of a company in crisis, making swift decisions based on limited information and balancing the competing interests of stakeholders; all of this requires sound judgment, often under extreme pressure. It is no surprise that, when things go wrong (or perhaps more accurately when parties feel they have lost out), the IP can become the focus of blame, and their insurance policy an attractive target for ‘last resort’ litigation.

The traditional situation in which an IP finds themself the target of litigation is one where lenders have enforced personal … Continue Reading