Cross Border Restructuring and Insolvency Update - July 2016
Thursday, 28th July 2016
Re 19 Entertainment Ltd  EWHC 1545 (Ch)
The English Court granted recognition of Chapter 11 proceedings in relation to a company that was incorporated in the UK but had its centre of main interests ("COMI") in the United States, confirming that the Directors were foreign representatives for the purpose of the Cross Border Insolvency Regulations 2006 ("the Regulations").
Hosking v Apax Partners LLP (unreported - 19 July 2016)
The English Court refused an application by Liquidators to stay English proceedings pending the outcome of similar proceedings in the US.
The Joint Liquidators of a Luxembourg company ("the Company") applied to stay English proceedings that they had brought against private equity investors ("the Defendants") until similar proceedings in the US had been resolved, or for three months to enable the Liquidators to raise finance for the litigation.
New Insolvency Regime in Malaysia
The Malaysian parliament has passed the Companies Bill 2015 ("the Bill"), which seeks to modernise the country''s insolvency regime and will replace the Companies Act 1965. Once Royal Assent is received, the Bill will introduce new rescue mechanisms for companies. The first new mechanism is the concept of Corporate Voluntary Arrangement, which allows directors of a private company to put forward proposals for debt restructuring to creditors. The second rescue mechanism being introduced is that of Judicial Management. This allows a company''s directors, shareholders or creditors to apply to the court for the appointment of a Judicial Manager. Once appointed, the Judicial Manager will take over management of the company in an attempt to save it.
New Business and Bankruptcy Laws come into force in the Netherlands
Earlier this month, four new laws came into force in the Netherlands which impact various aspects of business and bankruptcy fraud. The first law, The Directors Disqualification Act, allows the court to disqualify a director for up to 5 years following an application that there has been clear mismanagement by the director. The second, the Bankruptcy Fraud Criminalisation Act, clarifies the requirements on individuals to retain proper records and produce such documentation to the trustee in bankruptcy as required. The third law is the "House for Whistleblowers Act", which creates a new organisation to investigate apparent wrongdoing in a corporation. Finally, existing laws have been updated to require electronic filing of documents in the Trade Register from 2017.
Thailand introduces new Business Rehabilitation Scheme for Small and Medium Sized Enterprises (SMEs)
The amended Bankruptcy Act (No. 9) came into force in Thailand on 25 May 2016. The amendment creates a new scheme for SMEs involving a business rehabilitation supervised by the court. This scheme was previously only available to companies with debts of more than 10 million Thai Baht, but is now open to individuals, partnerships, LLPs and companies who carry out SME business. Under the new regime, to qualify individuals must have debts of over 2 million Thai Baht, limited companies between 3-10 million Thai Baht and other entities over 3 million Thai Baht. The scheme aims to support SMEs who have poor financial liquidity but who have the capability to recover. The scheme includes an automatic moratorium period that continues until the expiry of the Rehabilitation Plan.