Recently, the Office of the United States Trustee (the “UST”) has been objecting to debtors’ motions to establish bidding procedures to sell some or all of an estate’s assets pursuant to section 363 of the Bankruptcy Code. As highlighted in three recent Delaware cases, the UST has objected to stalking horse bid protections on a number of grounds, including: (a) when such protections would be payable; (b) the proposed priority classification for such protections; (c) the scope of the bid protections; and (d) whether the debtor has demonstrated that such protections benefit the estate and are necessary to preserve estate value. Understanding the UST’s concerns is critical when negotiating with a stalking horse bidder.
For those in the mid-market who have watched developments in restructuring plans (RP) move from a potential rescue tool, to something prohibitively expensive, the OutsideClinic RP might be one to watch. Not least because the RP seeks to cram down HMRC.
Following RPs proposed by Naysmyth and the Great Annual Savings Company (which were unsuccessful in cramming down HMRC) the appetite to use an RP in the mid-market does seem to have quietened down, despite HMRC subsequently issuing guidance for insolvency practitioners intended to help companies that wish to restructure using an RP.
Our recently updated article considers how EU and German civil and regulatory law approach crypto assets with a particular focus on how those types of crypto assets are dealt with in an insolvency.
In this article we explore the different types of crypto assets there are, the legal nature of them, how crypto assets are dealt with in insolvency proceedings and the recovery of such assets.
When it comes to applications by office-holders for approval of their remuneration, the message in the case of Poxon and another v Wejo Ltd (in administration) [2025] EWHC 135 (Ch) was, the detail matters.
Background
Having failed to obtain approval from the creditors in respect of both their pre and post administration costs, the joint administrators of Wejo invited the court to fix the basis of their post-administration remuneration and expenses by reference to time properly spent by them and their staff in attending to the administration of the company pursuant to r. 18.23 of the IR 2016 and approve their unpaid pre-administration costs as an expense of the administration pursuant to r. 3.52(5) of the IR 2016 (the Application).
Certain creditors of Wejo intervened to oppose the Application on the grounds that the joint administrators’ evidence in support was insufficient to enable to court to properly consider the Application.
Although the case of Anthony John Wright and Alastair Rex Massey vs. Scottish Court of Session [2024] CSOH 105 is (as the name suggests) a Scottish decision, there are several takeaways from the case relating to the content of progress reports, which could usefully be applied and followed by English practitioners when making their own application. Not least, because of the words of warning from the judge:
“It is important that administrators and their advisers bear in mind that an extension of an administration should never be applied for, or granted, as a matter of formality. It is not uncommon for the court to encounter cases where serial applications have been made, often on (literally) the same grounds from 1 year to the next, with no discernible sign of progress being made; and of course, if there is an expectation that extensions will be granted without difficulty, there is a danger that administrators will not be incentivised into completing the administration within the existing deadline, confident that another one will be along in the fullness of time“
This case concerned an application to extend an administration that had originally commenced on 19 November 2020 and had been extended on three previous occasions. The court was keen to understand what progress had been made, that creditors had been informed of the application and given a chance to object and that the extension period was the appropriate length.
Despite the warning above the judge acknowledged that this administration was complex and did not fall into that category and was prepared to take at face value the assertion that further time was required to conclude the administration, despite some misgivings about the information in the progress reports.
In his judgment to sanction the restructuring plan (“RP”) of Revolution Bars[1], Justice Richards proceeded on the basis that the Class B1 Landlords and the General Property and Business Rate Creditors were dissenting classes, notwithstanding that they approved the Plan by the statutory majority. This is because they did not approve the Plan at “meetings”, since only one person was physically present at each “meeting” even though the chair held proxies from other creditors.
The decision handed down in Pagden and another v Ridgley [2024] EWCH 3047 (Ch) is a helpful clarification on whether agreed costs and expenses incurred by an office-holder in the context of dealing with assets which are subject to a fixed charge in an administration or liquidation, are capable of subsequent challenge under rule 18.34 of the Insolvency (England & Wales) Rules 2016 (SI 2016/1024) (the Rules).
Decision
ICCJ Greenwood held that pre-agreed costs and expenses of an insolvency practitioner (IP), which the fixed charge holder had agreed could be paid out of the proceeds of realisation of the relevant fixed charge asset do not constitute “remuneration” or “expenses” for the purposes of Rule 18.34, and are therefore not capable of challenge on the basis that they were “excessive” or fixed on an “inappropriate” basis.
This decision establishes (a) the importance of an IP agreeing with a fixed charge holder what costs and expenses they can recover out of fixed charge realisations at the outset – the expenses regime will not help, and relying on other equitable principles could potentially leave them out of pocket; and (b) once an agreement is in place, that a fixed charge holder has limited grounds to challenge agreed fees (although note our commentary below) and therefore they can be confident of recovering what they have agreed.
For fixed charge holders, the decision is a “note to self” that in agreeing fees with an IP for dealing with the fixed charge assets at the outset, there will be limited scope to challenge these after the sale has concluded, even if retrospectively such costs appear to be disproportionately high.
Using the same or similar name of a company that is in insolvent liquidation is prohibited by s 216 of the Insolvency Act 1986 (IA).
A director who acts in breach of s216 by being a director of, or being involved in the promotion, formation or management of a company that is using a prohibited name, risks personal and potentially criminal liability (s217 IA 1986) – unless one of three “excepted cases” set out in the Insolvency Rules 2016 (Rules) applies.
The purpose behind s216 IA was to stop the so called “phoenix” syndrome whereby a shelf company was brought to life using the same or similar name to a company that has gone into liquidation by the same directors. The prohibition and risk for acting in breach of s216 was therefore aimed at preventing directors from liquidating one company (often after having run up significant debt) and then continuing business under the guise of a new company which, to the outside world, appeared to be the same company they had always done business with. The directors would be protected by the limited liability status of the new shelf company and trade on the goodwill of the liquidated company – all at the expense of creditors.
Although not all companies using the same or similar name are “phoenix” companies, there is no easy way to distinguish between the good and the bad cases. This is why s216 and 217 of the IA are so widely drawn (to capture all potential cases) but is also the reason why there are exceptions.
This article, that was recently published in INSOL, provides a comparison of directors’ duties between several European jurisdictions – England and Wales, Germany, Italy, the Czech Republic and the Slovak Republic.
It explores the role of directors and their general duties and obligations in a going concern scenario and examines how those duties might change as a business moves into a period of distress or becomes insolvent.
As noted in the article there is one feature that is common to most jurisdictions and that is the obligation not to continue trading if a company is insolvent.
Throughout his 2024 campaign, President Donald Trump vowed that if re-elected, he would address unfair trade practices, rebalance trade relationships, and fund other economic proposals through new and expanded tariffs. With his return to the White House, the world is grappling with a complex web of international trade risks and potential opportunities in 2025.
President Trump’s first term offered only a small preview of what we can expect on trade policy over the next four years. If executed, his campaign promisesrepresent a transformational restructuring of US tariff policy, a manifestation and acceleration of the broader evolution of how the United States – and the world – approaches trade and economic policy.
His remarks, as well as long-standing proposals developed by his closest trade advisers, will present challenging scenarios for businesses that rely on global supply chains, exports and investments across virtually every industry. Tariff actions implemented (like those applied against goods from China and steel and aluminium generally) as well as threatened (such as those proposed against numerous trading partners in response to digital services taxes) during his first term are discrete examples of what could follow, but the stakes are much higher, and the scope much wider, today. There is no one point in time where companies must respond – President Trump has already pledged new tariffs on Mexico, Canada and China, and the playing field will remain dynamic as the administration debates, proposes and implements new trade policies.
