(1) Edgeworth Capital Luxembourg SARL (2) Aabar Blocks SARL v Glenn Maud  EWHC 1016 (Ch)
Further to our updates in December and January, there has been a further development in relation to this case. The High Court heard the second adjourned hearing of the bankruptcy petition in relation to Glenn Maud. The Court considered whether the Petitioners had an ulterior motive in bringing the bankruptcy petition, but ultimately a Bankruptcy Order was made.
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Rodney Mark Gardner v Lemma Europe Insurance Co Ltd (In Liquidation)  EWCA Civ 484
The Court of Appeal has considered the High Court's previous refusal to lift the automatic stay imposed by Article 20 of the Cross-Border Insolvency Regulations 2006 ("Model Law").
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Amendments to the Czech Insolvency Act 2016
The Czech government have approved a change to the Czech Insolvency Act to switch the focus away from profit, to following the stated aims of the Insolvency Act. Previously, cases were assigned by district branches, and it was common practice for a single insolvency practitioner to have many branch offices, to increase the number of cases they would receive. Cases will now be distributed amongst 14 regions, and IPs will have to nominate their chosen branch office, with up to one branch per region. The aim of this is to lead to a fairer assignment of cases to IPs. A further amendment to the Act allows the Ministry of Justice to monitor the exercise of the IP's legal duties, which includes new offences created by the amended Act, which could result in a fine (c.£143k) or suspension from office. The changes are expected to come into force at the beginning of 2017.
India's Insolvency and Bankruptcy Code
The Insolvency and Bankruptcy Code approved by Parliament earlier this month empowers employees, creditors and shareholders to initiate a resolution process at the first sign of financial stress, such as default on repayment of a bank loan. If the debt remains unresolved after the extended nine-month resolution period, the creditor can seek attachment of all immovable assets, including overseas assets, that the debtor had given as personal guarantee for taking out the loan. The current insolvency legislation is covered in various Acts, causing delays, and the Bankruptcy Code will improve this by consolidating the existing framework. At present, only 25% of Indian creditors get their money back when the average business goes bust, according to figures from the World Bank, which is compared with an average recovery rate of 77% for high-income nations. The new law is touted as a landmark change to improve doing business in India.
International Investment Arbitration for Danesita against Hungary
The International Centre for Settlement of Investment Disputes ("ICSID") have declared Hungary liable for the breach of a bilateral investment agreement between Hungary and Portugal in 1992. A supplier of Danesita, a biscuit supplier throughout Europe, applied for Danesita's liquidation in August 2006, and it was put into Liquidation in November 2007. In an attempt to save the Company, Dan Cake, the parent company, had requested the bankruptcy court to convene a hearing to reach a settlement with all creditors of the Company. Instead of convening the hearing, the bankruptcy court asked for additional documents, which discouraged Dan Cake from pursuing the settlement plan and the documents were not submitted. As such, the court did not convene the composition hearing and Danesita was liquidated. In arbitration proceedings, Dan Cake argued that the bankruptcy court's order constituted a breach of Hungary's obligation under the investment treaty to ensure fair and equitable treatment of investments and that by demanding additional documents as a condition of convening the hearing whilst refusing to stay the liquidation, the bankruptcy court frustrated Dan Cake's efforts to save its investment in an unfair manner. Hungary denied its liability, but the Tribunal agreed with Dan Cake.