Foreign companies seeking to protect their overseas assets from their creditors have often turned to the United States for immediate relief under Chapter 11 of the Bankruptcy Code. Establishing jurisdiction in the US for purposes of a bankruptcy filing has proved easy – the establishment of a nominal professional fees retainer with a local law firm on the eve of a bankruptcy filing will suffice. Upon such a filing, the automatic stay under Section 362 of the Bankruptcy Code goes into global effect, shielding a foreign debtor’s assets, wherever they may be located, from creditors’ recovery actions and litigation. At times, that relief may be short-lived. An aggrieved creditor may challenge a bankruptcy filing as having been made in “bad faith”, seeking to dismiss a pending bankruptcy proceeding that it believes was designed for the sole purpose of frustrating the exercise of its creditor rights and remedies and for which US jurisdiction was manufactured.
Continue Reading Foreign Debtors and Chapter 11 – Seeking Relief from Turbulent Skies
Energy Crisis Looms for Business
Hot on the heels of crises driven by shortages of carbon dioxide and HGV drivers, it is perhaps the ultimate irony that – in the month before COP 26 in Glasgow – the UK and to a lesser extent much of the rest of the world has been rocked by a series of crises in the fossil fuel driven energy market. Whilst much of Asia is being impacted by a shortage of coal, Europe is feeling the full effects of a shortage of natural gas. This is perhaps particularly acute in the UK for a number of reasons including reduced storage capacity, issues with one of the key grid interconnectors to France, and a spike in global demand as the world economy seeks to pick up from where it left off pre-pandemic. The result? Eye watering wholesale gas prices that have risen more than double since January 2021, with a 70% increase since August. Prices rocketed a further 37% in one day on 6 October.
Continue Reading Energy Crisis Looms for Business
The Return of Crown Preference – Another blow for Floating Charge Holders
By Cathryn Williams, Paul Muscutt and Beth Bradley of the London Crowell Restructuring Team.
The Insolvency Act 1986 (HMRC Debts: Priority on Insolvency) Regulations 2020 (SI 2929/983) (the Regulations) were made on 11 September 2020 and will come into force on 1 December 2020.
As a result of the changes brought about by
The Corporate Insolvency and Governance Act: The Moratorium and just how “super” is Super Priority?
By Cathryn Williams, Paul Muscutt, Andrew Knight and Beth Bradley
Following our recent post (https://www.restructuringmatters.com/?p=2017&preview=true) on the new Corporate Insolvency and Governance Act 2020 (“the Act”), we now take a closer look at the moratorium and the effects on priority between pre-existing and moratorium lenders.
The New Moratorium – an Overview
The moratorium is
All change – wide-ranging reforms to UK Insolvency Law
By Cathryn Williams, Paul Muscutt and Beth Bradley
The full implications of COVID-19 may not be known for some time, but it has had an immediate impact upon UK insolvency law. The government has expedited the Corporate Insolvency and Governance Act 2020 (“the Act”) through Parliament in order to support distressed businesses and assist with
Crowell & Moring – Restructuring Capabilities to Combat the Impact of COVID-19
In these unprecedented times, all businesses will be facing issues they have never encountered before. The disruption caused by the measures imposed to combat the COVID-19 outbreak are significant and wide-reaching, impacting every business and its suppliers, customers, workforce, investors and lenders. At Crowell & Moring, our lawyers across the globe have extensive experience of
Crowell & Moring lead in the appointment of administrators over the Carlauren Care Home Group
The London Crowell & Moring restructuring team (led by partners Cathryn Williams and Paul Muscutt) recently successfully acted in a highly contested application to appoint administrators to the holding companies of the Carlauren Care Home group. For further information, see link below:
https://www.crowell.com/NewsEvents/PressReleasesAnnouncements/Carlauren-Care-Homes-Group-Placed-into-Administration/pdf
http://bit.ly/35KTpji
Going backwards – the reintroduction of crown preference
In an article recently published in Business Money, Crowell & Moring partner Paul Muscutt comments on the issues surrounding the potential reintroduction of crown preference:
http://www.business-money.com/assets/Crowell_Moring_April19.pdf
Disguised Remuneration Schemes and the Loan Charge
A disguised remuneration scheme (DRS) is a tax avoidance scheme, many of which involve artificial remuneration arrangements between an employer and employee. The schemes commonly provide for an employee to be partially remunerated through the company payroll system but with the majority of their remuneration taking the form of a loan. The loan is often funded via a third party (typically an off-shore trust) but, where the loans are never intended to be repaid, HMRC treat the monies advanced as taxable income.
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Retention of title – the unpaid seller v. the asset based lender
There are many issues that can hinder the collection of book debts and insolvency (of either the creditor or the debtor) is usually the catalyst for most them. Following an insolvency, those attempting to collect book debts are often faced with a number of reasons as to why a debtor can’t or won’t pay, including the set-off / contra arrangements, product warranty concerns, defective or non-delivery of goods or services and last, but not least, retention of title (“RoT”) clauses.
Continue Reading Retention of title – the unpaid seller v. the asset based lender