Cross Border Insolvency Update - July 2019

UBS AG New York and others v Fairfield Sentry Ltd (in liquidation) and others (British Virgin Islands) [2019] All ER (D) 122 

The Privy Council dismissed an appeal from the Court of Appeal of the Eastern Caribbean Supreme Court (BVI) where the appellant sought an anti-suit injunction against the liquidators of Fairfield Sentry Limited to prevent proceedings in the US bankruptcy Court. 

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Re Sturgeon Central Asia Balanced Fund Ltd (in Liquidation) [2019] EWHC 1215 (Ch)

Winding up proceedings on just and equitable grounds of an indisputably solvent company, incorporated in Bermuda, were recognised in Great Britain as a “foreign main proceeding” under the Cross Border Insolvency Regulations 2006 (CBIR).

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Fashion chain Select agrees second CVA

Select, the UK budget fashion retail chain owned by Turkish entrepreneur Cafer Mahiroğlu, has agreed a second Company Voluntary Arrangement (CVA) in a space of just over a year after 87% of creditors approved the new terms.

Select originally filed for the first CVA back in April 2018, allowing it to renegotiate with its landlords in relation to the rents payable across its stores in England and Wales. However, revenues were below forecasts and the company entered Administration. The Administrators proposed the new CVA as an exit to the Administration. 

The approval of the second CVA has secured the continued operation of Select’s 169 stores in the UK and the continued employment of its 1,800 staff members.

Andrew Andronikou, Joint Administrator, said: “this should provide a platform upon which the company can deliver changes to its operational costs and structures, allowing it to stabilise and move forwards”.

Dubai International Finance Centre introduces new insolvency law

The Dubai International Finance Centre (DIFC) has enacted a new insolvency law, designed to bring it in line with international best practice.

The new law enhances the rules governing winding up procedures, provides for a new Administration process where there is evidence of mismanagement or misconduct, and introduces a new debtor in possession bankruptcy regime.

The aim of the new law is to balance the needs of all stakeholders in the context of distressed and Bankruptcy related situations in DIFC and also incorporates the United Nations Commission on International Trade Law, Model Law on cross border insolvency proceedings.

Essa Kazim, governor of DIFC said: “ensuring that businesses and investors can operate across the region with confidence is crucial to our role in connecting the economies of East and West”.

Germany's Weber Automotive files for insolvency

Weber Automotive, one of the leading companies in the global automotive supply industry, has filed for insolvency. The company operates manufacturing plants in Germany, Hungary and the United States, employing 1,500 people.

French private equity group Ardian acquired a majority share in the company in 2016. It is reported that Ardian and the Weber family have been in disagreement about the right restructuring strategy for the company.

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