Under the Insolvency Act, once a restructuring plan has been confirmed, the debtor is discharged from its debt and is subsequently prevented from paying its creditors their deficiency or repaying other granted benefits. Consequently, any claims that were not registered during the insolvency proceedings – even if they should have been – fall under this restriction and cannot be repaid. That said, exceptions to the rule exist.
The Insolvency Act provides insolvency administrators with an abundance of tools to challenge any actions committed by a debtor during a crucial period prior to the opening of insolvency proceedings. Two recent Supreme Court decisions summarise the existing judicature and further clarify the elements of avoidance due to preferential treatment.
Before the most recent update to the online FAQ section by the responsible authority, the question of whether Beneficial Ownership Register Act compliance is an insolvency administrator's duty was unclear. Due to the tight timeframes for complying with the act and the range of practical problems arising from it, the question has caused headaches for insolvency law practitioners in Austria.
The Privy Council has determined that, notwithstanding the absence of express statutory provisions permitting service out of the jurisdiction of fraudulent preference claims, such claims are to have extraterritorial effect. This decision clarifies the law as it relates to the extraterritorial effect of fraudulent preference claims; however, it also creates difficulties for subscribers to mutual funds that may be held liable for investments made on behalf of third-party beneficiaries that are the ultimate recipients of payments.
Due to the lockdown measures and other restrictions imposed by the government to fight the COVID-19 pandemic, many companies are dealing with revenue losses while having the same level of (fixed) costs. In this video, Bart Heynickx, counsel at ALTIUS, discusses various insolvency issues that are arising in Belgium as a result of COVID-19.
Due to the lockdown measures and other restrictions imposed by the government to fight the COVID-19 pandemic, many companies are dealing with revenue losses while having the same level of (fixed) costs. Royal Decree No 15, which recently entered into force, implements new temporary measures to protect businesses that had not ceased payment before or on 18 March 2020 but found themselves in difficulty afterwards due to the COVID-19 crisis. These measures will last until 17 May 2020, unless extended.
A Supreme Court judgment has clarified that new financing during reorganisation proceedings in principle results in new claims, leading to a privileged status of such claims in the framework of any subsequent liquidation. Further, it confirms that the courts require financing to be actual and new (ie, mere refinancing is insufficient).
The legal form of the actio pauliana offers options for creditors which are confronted with debtors that are disposing of important assets or organising their insolvency. This article reflects on some of the options offered under Belgian law by the actio pauliana, commonly referred to in English as the 'clawback' rules.
A number of legislative changes to Book XX of the Code of Economic Law may be required following the adoption of EU Directive 2019/1023/EU on preventive restructuring frameworks. This article focuses on the directive's potential effect on Book XX with regard to debtors in possession, the duration of moratoria, the suspension of enforcement during moratoria, the suspension and termination of ongoing contracts, the cramdown of creditors and the acceptance of reorganisation plans.
In a major development in BVI insolvency law and practice, the Commercial Court recently held that provisional liquidation is available to facilitate a restructuring. The objective of a restructuring provisional liquidation is to provide a better outcome for creditors than would be likely on a winding up. The Commercial Court's decision will certainly influence the current debate in the British Virgin Islands regarding insolvency legislation reforms.
The Court of Appeal recently considered the test for appointing liquidators to a company following an alleged loss of substratum. The case provides insight on the principles of loss of substratum, particularly in a case where a company's object is not prescribed by its memorandum and articles of association.
In separate but related proceedings, the BVI courts have permitted an applicant to inspect documentation relating to the liquidation of certain BVI companies. The decisions solidify the open justice policy and highlight the importance of allowing beneficiaries to oversee trustees' activities in order to ensure that the trust property is properly managed and that trustees can be held to account accordingly.
May 2020 marked the 22nd anniversary of the Cayman Islands segregated portfolio company (SPC). This article reflects on the first two decades of the SPC – in particular, the principles established by the courts concerning insolvent SPCs. These cases have posed some interesting and novel questions for the Cayman courts to resolve and the decisions have fleshed out the statutory provisions as regards the status, duties and powers of office holders appointed in connection with SPCs.
The Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding-up petition, pursuant to Section 99 of the Companies Law (2020 Revision). Section 99 operates to help maintain the status quo of a company at the date of a winding-up petition so that the winding-up petition can continue to achieve its purposes.