Cross Border Restructuring and Insolvency Update - December 2016

ECJ decides that rights in rem should be interpreted in accordance with German law, despite insolvency proceedings having been opened in France

In the recent case of SCI Senior Home (in Administration) v Gemeinde Wedemark, Hannoversche Volksbank eG, the Court of Justice of the European Union handed down judgment on the question of whether a right in rem created under national law should be considered a "right in rem" for the purposes of Article 5 of the Council Regulation (EC) 1346/2000 on insolvency proceedings (the "Insolvency Regulation").

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PricewaterhouseCoopers v SAAD Investments Company Limited (In Official Liquidation) and another (Bermuda)

PricewaterhouseCoopers sought to recover their costs in complying with disclosure orders obtained by the Liquidators of Saad Investments Co Ltd and Singularis Holdings Ltd. The disclosure orders were ultimately set aside but the costs appeal was rejected by the Court of Appeal of Bermuda.

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Short stories

Debt restructuring law in Singapore faces substantial change

Singapore has launched new draft legislation as the first of a number of legal reforms intended to make it easier for both Singapore companies and non-Singapore companies to carry out debt restructuring projects in Singapore. The main areas of change to the law affect schemes of arrangement, judicial management and cross-border insolvency.

The reforms reflect the country's ambition to become the debt restructuring hub of Asia Pacific, and are similar to the recommendations that came out of the UK Insolvency Service's review that was published earlier this year.

European Commission publishes proposal for a new restructuring and insolvency Directive

The proposed Directive will specifically deal with "preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures and amendments to Directive 2012/30/EU (2016/0359 (COD))".

The proposed Directive contains a number of rules that Member States will have to adopt as part of their restructuring and insolvency legislative framework, some of which stem from current UK insolvency legislation. Although the Directive, when it comes into force, may not be binding on the UK post-Brexit, a consultation on various measures very similar to those in the proposed Directive has been launched in the UK, so it is likely that the provisions will still come into force in the UK by some means.

The Bankruptcy (Scotland) Act 2016 in force

The Bankruptcy (Scotland) Act 2016 came into force on 30 November 2016. The 2016 Act is a consolidation of the Bankruptcy (Scotland) Act 1985, the Bankruptcy (Scotland) Act 1993, Part 1 of the Bankruptcy and Diligence etc. (Scotland) Act 2007, Part 2 of the Home Owner and Debtor Protection (Scotland) Act 2010, the Bankruptcy and Debt Advice (Scotland) Act 2014, the Protected Trust Deeds (Scotland) Regulations 2013 and related enactments.

The 2016 Act only applies where a bankruptcy petition is presented on or after 30 November 2016. For bankruptcies commencing prior to 30 November 2016, the 1985 Act will continue to apply, with certain changes made to the 1985 Act by the 2014 Act only applying to bankruptcies commencing after 1 April 2015.

This update was jointly written by Alan Bennett and Olivia Reader.

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