Insolvency and Secured Transactions

When a corporation has spent all its equity through the accumulation of losses, thus showing a negative equity in its balance sheet, Section 225 (1) of the Business Enterprise Code (UGB) prescribes that its management must explain in the notes to the annual accounts whether the debt level is high enough to be of relevance under insolvency law. This would be the case if a negative continuity forecast were added to the debts on the books.

Read more: Company in Distress – Remedies and Solution

Contact: Tony Stumm, Partner; Carter Newell (Queensland, Australia)

It sometimes happens that stakeholders become disgruntled with the liquidator appointed to wind up the affairs of a company. So, what can be done?

There is power in s 473(1) of the Corporations Act 2001 (Cth) for the court to remove (and replace) a liquidator. But, how hard is this process?

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Contact: Headrick Rizik Alvarez & Fernandez (Dominican Republic)

On August 7, 2015, a new law on Restructuring and Liquidation of Companies and Business Persons (“Law No. 141-15”) was signed into law in the Dominican Republic. The law establishes mechanisms and proceedings to protect creditors in cases of financial difficulty of their debtors by allowing the latter to remain in operation and overcome the economic difficulties that thwart them from complying with previously undertaken obligations, thus achieving business continuity of companies and business persons. Likewise, the Law establishes a legal framework applicable to restructuring and cross-border insolvency proceedings. The Law will enter into effect on February 7, 2017, a date that is 18 months following its enactment.

Read more: New Law For Restructuring and Insolvency in the Dominican Republic

Contact: Cindi E. Cohen, Lerch, Early & Brewer (Maryland, USA)

In the case of In re Adoni Group, Inc., the Bankruptcy Court for the Southern District of New York upheld the perfection of a security interest where the financing statement was filed prior to the execution of the security agreement without prior written authorization from the debtor.   Capital Business Credit (CBC) filed a UCC-1 financing statement on May 15, 2013, asserting that it held a security interest against the debtor's assets. The next day, CBC and the debtor entered into a factoring agreement and an inventory security agreement.

Read more: Court Upholds Validity of Security Interest Where Financing Statement Was Filed Early

Contact: Att. Nilay Celebi; Erdem & Erdem (Turkey)

The duties, obligations and liabilities of liquidators who play a major role in the dissolution and liquidation of companies in Turkey are briefly explained below.

Read more: Duties, Obligations and Liabilities of Liquidators in Turkey