266 Index. starting insolvency proceedings, business judgment rule, 93, 176 7, 183, 186, 188, 191, 211

Transcription

1 Index absolute priority rule, 80, 102, 105 7, 116n89 administration, 9 13 pre-pack, priority ranking in, 30 1 procedure for companies, 53 9 administrative expense, 112n37 administrative receivership (UK), 31 6 acting as agent, 33 administrative receiver, 31 continuation of business, 31 2 contracts of employment, 32 existing contracts, 32 fixed charge receiver, 35 6 function and duties of receiver, 33 indemnity from appointor, 33 limited power to dispose of property subject to prior charges, 34 no power to deal with non-owned assets, 34 position of directors, 33 power of administrative receiver, 33 4 power to contract, 32 power to sell charged property, 34 preferential creditors, 34 5 prescribed part, 35 procedure for companies, 57 9 termination of, 35 affiliate, 88, 95, 138, 161n182, 161n186 amend and extend schemes, 22, 78n3 antecedent transactions (UK) avoidance of floating charges, 37 breach of duty, 38 directors disqualification, 38 9 extortionate credit transactions, 37 fraudulent trading, 38 personal liability of directors, 37 8 preferences, 36 recognition of foreign insolvency proceedings, 40 4 transactions at undervalue, 36 transactions defrauding creditors, 36 7 wrongful trading, 38 appeals in US allocation of costs of appeal, 146 balancing of harms, consequences of not obtaining stay, direct appeals to circuit courts, final vs. interlocutory orders, harm, standard of review, 144 stays pending appeal, supersedeas bonds, US bankruptcy, Apple, 169, 176 Arcapita Bank, 83 4, 94 attorneys, role in reorganization process, automatic stay (US), 80, 84, 96, 103, 134 application to non-debtor affiliates, 87 8 Bankruptcy Code, global scope of, 86 8 BAFJA (Bankruptcy Amendments and Federal Judgeship Act of 1984), 123 4, 133, 135 bankruptcy (US), 50 appointment of insolvency practitioner, 74 5 commencement of case, description and purpose of, 73 4 duties and powers of trustee, 75 6 history of laws, insolvency practitioners role ending, 76 proceedings, role of insolvency practitioner, 75 see also Chapter 11; US Bankruptcy Code 265

2 266 Index Bankruptcy Act (Singapore), 220 6, 232, , 249, 255n19 bankruptcy courts as Article III courts, avoidance actions, BAFJA (Bankruptcy Amendments and Federal Judgeship Act of 1984), 123 4, 133, 135 Bankruptcy Reform Act of 1978, 120 1, 122, 123 code overview, core proceedings, Emergency Jurisdictional Rule, jurisdiction and powers of, overview of, powers of, proposed changes, venue of cases and proceedings, bankruptcy judges (US), 81, 94, 100n4, 119, 132 3, 142, 151, 155n71, 155n73, 158n131, 160n161 Bankruptcy Reform Act of 1978 (US), 120 1, 122, 123, 158n131 Bankruptcy Rule 7001 (US), 136 Bankruptcy Rule 8005 (US), 146, 148 9, 164 5n273, 296 BAP (bankruptcy appellate panel) (US), 121, 123 best interest test, 104 bidding process, 363 Sale, breach of duty, 38 break-up fees, 99, 115n80 1 business insolvency criminal liability risk for directors and officers, Delaware approach to directors duties, disqualification of directors, duties of directors of corporation during, identifying company insolvency, contract, remedies for breach of fiduciary duties during, rules permitting documents overriding statutory duties, starting insolvency proceedings, business judgment rule, 93, 176 7, 183, 186, 188, 191, 211 CABAR [Companies (Application of Bankruptcy Act Provisions) Regulations], 222, 258n95, 259n98 CDDA (Company Directors Disqualification Act 1986) (UK), 38 9 disqualification, 178, 202 4, 217n118, 217n122 shadow director, 180 Chapter 11 (US) 363 Sales of debtors assets, acceptance by impaired class, 104 administrative expenses and priority claims, automatic stay, 84, 86 8 best interest test, 104 cash collateral, 89, 91, 92, 127 checks on debtors leadership, 94 5 creditors remedies to dismiss or limit, 85 6 debtor s leadership of reorganization, 92 5 DIP (debtor-in-possession) financing, 80 1, 89 2 exclusivity to propose and solicit, 93 4 feasibility of plan, 104 procedure for plan confirmation, reorganization under, 79 82, reorganizing operations through contract assumption or rejection, 95 7 role of attorneys in reorganization, secured creditor s right to credit bid, standards for confirmation of plan, standards for plan cram down on dissenting class, see also bankruptcy; US Bankruptcy Code

3 Index 267 Chapter 15 of the US Bankruptcy Code, 85, 127, , 137, 141, 162n222 claim, definition (US), CLRFC (Company Legislation and Regulatory Framework Committee), 248, 260n142, 262n193 COMI (centre of main interests), 13, 47n11 companies administrative receivership, 57 9 administrator s role ending, 56 7 appointing insolvency practitioner, 53 4 comparison with UAE Draft Law, duties and powers of administrator, 54 5 powers of administrator, 55 role of insolvency practitioner, 54 role of stakeholders in controlling administrator, 56 solvency test, 53 types of restructuring or insolvency procedures, 51, 52, 53 9 Companies Act 2006 (UK), 8, 49, 51 corporate governance system, 171 CVA (company voluntary arrangement), 59 director duties, 189 flexible governance, 172 national regulation, 178, rules in UK, 199, 203, 205 scheme of arrangement, 52, 62 Singapore legal system, 220, 221 2, 227, 230 2, 234, 237 9, 242, , 255n19, 257n73, 257n79 company laws (US and UK) duties and liabilities of leaders prior to insolvency onset, effect of insolvency on duties of leaders, governance rules, insolvency context, principles of governance, rules for starting insolvency proceedings, see also corporations; LLC (limited liability company) compulsory liquidation, 63, 64 5, 66 7 consensual deals, restructuring, 2 6 contracts administrative receivership, 32 reorganization by assumption or rejection of, 95 7 corporate insolvency, Singapore, corporate restructuring (UK) challenge to antecedent transactions, company voluntary arrangements, consensual deals, 2 6 cram down procedures, debt to equity swaps, groups of companies, 5 6 liquidation, non-consensual restructuring, 6 8 priority ranking in administration and liquidation, 30 1 receivership and administrative receivership, 31 6 reforms (UK), 44 6 schemes of arrangements, special insolvency regimes, 46 UK banking sector, 45 6 UK financial regulation, 44 5 valuation, 4 5 corporations, 170 authority of officers, 171 Delaware approach to directors duties in insolvency, duties and liabilities in UK, before insolvency, duties and liabilities in US, before insolvency, duties and liabilities of directors and officers before insolvency, duties of directors during insolvency, contract, 198 principles of governance, rights and powers of directors, 171 rights and powers of owners, UK s governance system, 171 2

4 268 Index cram down, 7, 80, 92, 102, credit bid, , 106, 116n86 8 creditors debt to equity swap, INSOL principles, 2 3 preferential, 34 5 remedies in Chapter 11 case, 85 6 schemes of arrangement, 21 secured, enforcing rights, 27 transactions defrauding, 36 7 voluntary liquidation, 12, 64, 65, 67 8 voluntary winding-up, 28 9 see also secured creditors; unsecured creditors criminal liability, directors and officers during insolvency, cross-border insolvency, insolvency regime with, , 263 4n213 cross-collateralization, 91, 112n45 CVA (company voluntary arrangements), insolvency, procedure, with schemes of arrangements, 22 3 debtors eligibility, 110n11 entity organized outside the U.S., 83 4 debt relief order, 77 debt to equity swaps, declarative judgment, 136 de facto director, , 183 4, 190, 213n48, 213n50, 213n52, 215n83 Delaware General Corporation Law, 200, 212n4 Delaware law, 206, 211 company insolvency, 187 9, 192, 215n82 corporations, derivative suits, 202 LLC (limited liability company), 187 remedies under US law, 201 US corporations, 198 Delaware s Limited Liability Company Act, 177, 182, 197 Delaware Supreme Court, 174 5, 184 7, 189 de novo trial, 123, 144, 155n67 derivative action, 187, 201 2, 214n68 DIP (debtor-in-possession) financing, US Bankruptcy Code, 80 1, direct certification, 145, 163 4n251 directors definition in UK law, disqualification of, 38 9 personal liability of, 37 9 dismissal, remedy in Chapter 11, 85 6 diversity, insolvency needing, DRS (Debt Repayment Scheme), Singapore, 223, 226 Emergency Jurisdictional Rule, Employment Rights Act 1996, 49 Enron Corporation, 174 entrepreneurship, 43, 210, equitable mootness, 150 1, 166n308, 167n315 Evidence Act, Singapore, exit routes, administration, ex parte James principle, 247 extortionate credit transactions, 37 financial assistance, 234, 259n105 fixed charge, property subject to, 11 fixed charge receivership, 59, 77 floating charge, 11, 37 foreign insolvency proceedings disagreements between member states, 42 governing law, 41 jurisdiction of, 41 recognition of, 40 4 recognition outside the EU, 43 4 reference to European Court of Justice, 42 3 review of regulation, 43 scope of, 40 within the EU, 40 fraudulent trading, 38, governance rules, company laws, Griffin Securities Corp., 249, 257n79 harms balancing of, grant of stay, 149

5 Index 269 harms continued irreparable, 88, 134, 144, 147 8, 159n148, 165n285 implementation tools, pre-pack administration, indemnification, INSOL principles, 2 3 insolvency, 47n3, 50 types of procedures, 51, 52 see also business insolvency; corporate restructuring Insolvency Act 1986 (UK), 8, 49 51, 55, 58, 62, 71, 75, 178, 194, 202, 205, 260n142 insolvency lessons (Singapore) balancing regulation and autonomy, cost-effectiveness, cross-border insolvency, diversity, facilitating businesses, honesty, entrepreneurship and rehabilitation, importance attached to insolvency, regimes working together, regime with priority of payments, rescue regime with tools, unwinding of inappropriate transactions, well-regarded and trained practitioners and professionals, 248 insolvency practitioners (UK) bankruptcy of natural persons, 74 6 Companies Act scheme of arrangement, 62 compulsory liquidation, 63, 64 5, 66 7 CVA (company voluntary arrangement), debt relief order, 77 fixed charge receivership, 77 IVA (individual voluntary arrangement), 72 3 jurisdiction, 49 legal entities, licensed, 50 liquidation (winding up), 63 9 LPA (Law of Property Act) and fixed charge receivership, 59 official receiver, 51 procedures for companies, 53 9 relevant law, 49 role in liquidation, 64 9 voluntary liquidation, 63 4, 65 6, 67 8 insolvency regimes, Singapore, IPAS (Insolvency Professionals Association of Singapore Limited), 248, 262n194 IPTO (Insolvency and Public Trustee s Office) (Singapore), , 223, 254n1, 255n8 irreparable harm, 88, 134, 144, 147 8, 159n148, 165n285 ISCA (Institute of Singapore Chartered Accountants), 248, 262n195 ISDA (International Swaps and Derivatives Association), 235, 259n110 IVA (individual voluntary arrangement) role of insolvency practitioner, 72 3, 77 8 Singapore, judicial management, Singapore, judiciary, Singapore, jurisdiction, 25, 49, 47n2 jury trials, 135, 160n161 legal system, Singapore, Lehman Brothers Holdings Inc., 98, 99, 238 lessons, see insolvency lessons (Singapore) liquidation (UK) commencement of process, 27 8 compulsory, 63, 64 5, 66 7 court s discretion as regards winding-up order, 25 6 creditors committee, 30 creditors voluntary, 12, 64, 65, 67 8 creditors voluntary winding-up, 28 9

6 270 Index liquidation (UK) continued description and purpose of, 63 4 duties and powers of liquidator, 26 groups for winding-up order, 24 inability of company to pay debts, 24 jurisdiction of court, 25 members voluntary, 63 4, 66, 68 members voluntary winding-up, 28 petition, 25 power of disclaimer, 26 7 powers of liquidator, 29 priority ranking in, 30 1 provisional, 25 role of insolvency practitioners in, 64 9 secured creditors enforcing rights, 27 Singapore, 227 voluntary, 63, 65 voluntary winding-up, 27 winding-up by the court, 23 liquidator, 205 duties and powers of, 26 insolvency, 220, 233, 237, 242, malfeasance, 202 power of disclaimer, 26 7 wrongful trading, LLC (limited liability company) (US), 170, 212n14 Delaware approach during insolvency, 187 duties and liabilities of managers before insolvency, 177 contract, principles of governance, LPA (Law of Property Act) (UK), 59 Lyondell Chemical Company, 88, 112n34, 159n150 Malaysia, 249, 250, 263n200 MAS (Monetary Authority of Singapore), 221, 228, 235, 259n members voluntary liquidation, 63 4, 66, 68 Model Business Corporation Act (US), 171, 172, 174 7, 181 3, 198, 206, 212n4 6 Model Law on Cross Border Insolvency, UNCITRAL, 8, 44, 85, 111n17 Model LLC Act (Revised Uniform Limited Liability Company Act), 177, 198, 212n12 natural persons bankruptcy, 73 6 comparison with UAE Draft Law, 77 8 IVA (individual voluntary arrangement), 72 3 types of restructuring or insolvency procedures, 51, 52 non-consensual restructuring, processes, 6 8 Office of the United States Trustee, 105, 108 9, 141 overseas companies, COMI (centre of main interests), 13, 47n11 Pan Electric Group, Pensions Act 2004 (UK), 49 personal insolvency, Singapore, personal liability, directors, 37 9 plan confirmation process, standards for, powers administrator (UK), 10, 55 Bankruptcy Code Section (US) 105(a), bankruptcy courts and judges, declarative judgment, 136 injunctive, insolvency practitioner as liquidator (UK), 66 8 postconfirmation, subpoena, 135 trustee in bankruptcy, 75 6 preferences (UK), 36 pre-packs, process (UK), prepetition secured creditors (US), 89 92, 112n35, 112n43 priority of payments, insolvency regime,

7 Index 271 provisional liquidation, 25 public interest courts, 88, 134, 147, 149, 166n294 insolvency process, 242 3, 246, 254 Recast Regulation, 43, 47n5, 48n26 7 receivership, 31 6 Singapore, 229 see also administrative receivership rehabilitation, 1, 8, 72, 134, 231 2, 240 2, relevant date, 216n92, 233, 258n95, 258n98 remuneration, 236, 242 5, 261n164 reorganization (US) assumption or rejection of contracts, 95 7 checks on debtor s leadership, 94 5 debtor s leadership in process, 92 5 proposing and soliciting Chapter 11 plan, 93 4 role of attorneys, rescue culture, 1, 2, 4, 43 rescue regime, restructuring definition, 50 outside insolvency process, 47n3 types of procedures, 51, 52 see also corporate restructuring restructuring and insolvency procedures, see companies; natural persons ringfencing, schemes of arrangement (UK), advantages and disadvantages, 20 classes of creditors, 21 Companies Act 2006, 62 CVAs (company voluntary arrangements), 22 3 international level, 21 2 process, 20 1 Singapore, Section 105, US Bankruptcy Code, 87 8, 132 4, 137, 158n132 secured creditors (UK) administration, 9, 15, 17 administrative receivership, 35, 57 8 bankruptcy, 80, 84 company voluntary arrangement, 59 contract, 32 cram down of, credit bid, 116n87 fixed charge, 11 individual voluntary arrangement, 72 insolvency regime, 237, 240, 242 moratorium, 236 prepetition, 89 92, 112n43 protection of, 113n49 receivership, 229 rights of, 19, 27, 112n36, 224 scheme of arrangement, 62 Securities and Futures Act, Singapore, 222, 234, 259n109 shadow director, 37 9, , 183 4, 190, 213n50, 217n121 Singapore branches of government, corporate insolvency, executive, insolvency regimes in, judicial management, judiciary, legal system, legislature, 220 lessons from insolvency, liquidation (winding up), 227 personal insolvency, receivership, 229 schemes of arrangement, sources of law, see also insolvency lessons (Singapore) SIP 16 (Statement of Insolvency Practice 16) (UK), 15 Small Business Enterprise and Employment Act (UK), 46, 47n16, 47n19, 48n23 solvency test, procedure for companies, 53 stalking horse, substantial consummation, 150 1, 167n315 supersedeas bonds, Title 28, United States Code, 120, 124 6, 130, 133, 135, 137 8, 140 1, 152, 162n205

8 272 Index trading creditors, 5 transactions (UK) defrauding creditors, 36 7 extortionate credit, 37 preferences, 36 at undervalue, 36 see also antecedent transactions trustee (UK), 52, 58 trustee (US) appointment, 112n37, 13 14n62 bankruptcy, 71, 74 6, 78, 119, 124, 132, 140 Chapter 11, 94 5 composition, 70 1 term, 113n50 US Trustee program, 105, 1089 trust fund approach, 188, 190, 215n88 UAE draft federal insolvency law (2012), 51, 110 comparing UK company processes and, comparing UK processes for natural persons, 77 8 UK (United Kingdom) company laws, 169 corporate governance system, criminal laws of insolvency, derivative suits, 202 duties and liabilities of directors before insolvency, duties and liabilities of directors during insolvency, duties of directors of corporation during insolvency, fraudulent trading, legal jurisdictions, 47n2 misfeasance, 202 observations on nature of duties of directors and officers, contract, overview of formal processes, 7 remedies for breach of fiduciary duties during, 202 rules for starting insolvency proceedings, wrongful trading, UNCITRAL Model Law on Cross Border Insolvency, 8, 44, 85, 111n17 United States Judicial Conference, 122, 155n56 unsecured creditors, 27, 84 administration, 9 10, 12, 15, 30 administrative receivership, 33 5, 58 9 cram down, insolvency regime, 240, 242 role of attorneys, US Bankruptcy Code 363 Sales of debtors assets, 81, , 115n84 appellate procedure, automatic stay, 84, 86 8 cash collateral, 92 Chapter 11 reorganization, Chapter 15, 85, 127, , 137, 141, 162n222 creditors remedies to dismiss or limit Chapter 11, 85 6 debtor s leadership of reorganization, 92 5 DIP (debtor-in-possession) financing, 80 1, eligibility for Chapter 11 under, 82 6 entity organized outside the United States, 83 4 reorganization under Chapter 11, 79 82, reorganizing operations through contract assumption or rejection, 95 7 role of attorneys in reorganization process, Section 105, 87 8, 132 4, 137, 158n132 secured creditor s right to credit bid, Title 28, 120, 124 6, 130, 133, 135, 137 8, 140 1, 152, 162n205 see also Chapter 11 US Constitution Article III courts, 153 bankruptcy laws, 79, 110n1 jury trials, 135 role of judges, 118, 121 2, 124, 133 Seventh Amendment, 135, 159n158

9 Index 273 US (United States) company laws, 169 criminal laws of insolvency, Delaware approach to duties during insolvency, duties and liabilities of directors and officers before insolvency, duties of directors during insolvency, 206 duties of directors of corporation during insolvency, 206 duty of care, duty of loyalty, 174 observations on nature of duties of directors and officers, contract, remedies for breach of fiduciary duties during, 201 rules for starting insolvency proceedings, valuation, restructuring, 4 5 voluntary liquidation, 63, 65 voluntary winding-up (UK), 27 commencement of process, 27 8 creditors, 28 9, 30 members, 28 powers of liquidator, 29 winding up, see liquidation (UK) winding-up order court, 23 court s discretion, 25 6 groups for, 24 inability of company to pay debts, 24 petition, 25 wrongful trading (UK), 38, 192 4