Publication
Government Investigations in Singapore 2025
We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
United Kingdom | Publication | October 2022
On September 29, 2022 the Financial Reporting Council (FRC) published a report based on the results of research that looked at the challenges and opportunities that minority ethnic individuals might experience in progressing to the boards of FTSE 100 and FTSE 250 companies. The report shows that, while there are still significant challenges to be addressed, the need for change has been taken seriously across the spectrum, including senior managers, executive leaders, board chairs and executive search consultants.
The research involved interviews and focus groups with people in a range of senior positions in FTSE 350 companies, including chairs and non-executive directors (NEDs), as well as executive search consultants. It also involved a review of annual reports from 25 FTSE 100 companies and 38 FTSE 250 companies to assess the reporting of the breadth and depth of initiatives in place to diversify senior leadership, highlighting differences between the two groups where relevant.
As well as setting out key findings in all these areas, the report sets out a number of key recommendations, including the following:
Recommendations from interviews and focus groups on dismantling barriers to progression and implementing good practice
Recommendations from review of annual reports
Why is the decision important?
For the first time, the Supreme Court has considered whether there is a common law duty on directors to act in the interests of creditors when a company faces insolvency, but is not yet in an insolvency process (the so-called twilight zone) (the Creditors’ Duty). Unanimously agreeing that such a duty does exist, the judgment provides important guidance on when that duty arises and what it requires of directors.
What were the facts?
In 2009, a company, AWA, paid a substantial dividend of nearly all its net assets to its parent company, Sequana (the respondent). The company existed to pay a future environmental liability (the exact amount of which was unknown, and therefore a contingent liability) in respect of pollution clean-up costs. The dividend was paid in accordance with the Companies Act 2006 and the company was solvent at the relevant time.
Several years later it became clear that the cost of meeting the environmental liability was much greater than anticipated and AWA entered administration. Eventually the appellant, BTI 2014 LLC, took an assignment of AWA’s claim to recover from the directors an amount equivalent to the dividend. The Court of Appeal gave judgment in 2019, agreeing with the High Court that the dividend was lawful. The Court of Appeal commented on the Creditors’ Duty and when it would be engaged. On the facts of the case the Court of Appeal considered that the Creditors’ Duty was not engaged at the time that the dividend was paid.
What do I need to know?
The Supreme Court unanimously dismissed the appeal, finding that the Creditors’ Duty had not been triggered and therefore the dividend was lawful. There are five different judgements from the Justices, the leading judgment being given by Lord Briggs. The judgments agree on some points and not on others. Although the decision intentionally leaves some issues unresolved, the law has been clarified in some key respects:
What should directors do if a company is facing insolvency?
There are many practical steps that directors should consider taking. In her judgment, Lady Arden emphasises the importance of directors staying informed, maintaining up-to-date accounting information, and ensuring they are alerted if cash/asset reserves deplete so that creditors risk not being paid.
Directors should always take careful notes of decisions taken and the reasons for them. It is always prudent to seek professional advice promptly. Directors’ duties - and the risk of potential liabilities - is an evolving, complex area of law. Engaging advisers at the earliest opportunity provides the best opportunity of rescuing the company and of directors avoiding liability. Any member of our financial restructuring and insolvency team would be happy to discuss this further.
Publication
We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
Publication
The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
Publication
The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly.
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