It is difficult to predict what 2023 might hold for businesses in the UK. Given the difficult economic environment, many will already be facing a challenging start to the year. Although the challenges of the pandemic (such as lock downs) have gone, others have materialised. Energy price hikes and inflation rises continue to make trading conditions tough. At some point in 2023 affected businesses may have to restructure, and others may need to enter a formal process. … Continue Reading
The requirement for overseas entities to register or be registered on the UK Register of Overseas Entities (ROE) at Companies House could impact certain transactions that insolvency practitioners (IPs) and lenders are involved with. Our latest quick guide highlights some of those areas and flags points for IPs and lenders to consider when dealing with … Continue Reading
The recent decision in Re Astora Women’s Health LLC illustrates the importance of cross-border recognition of insolvency processes, highlighting the benefits of a joined-up global approach which recognises that modern business do not stop for international borders. With Astora hot off the presses and the twenty-fifth anniversary of the UNCITRAL Model Law on the horizon … Continue Reading
The power to appoint an administrator is an important power for debenture holders when seeking to enforce their security. In order to exercise that power, the debenture has to be a qualifying floating charge (“QFC”) and it has to be enforceable. The case of Borg-Olivier v Knowles & Ors [2022] EWHC 2579 (Ch) (“Borg-Olivier”), highlights … Continue Reading
On 11th November 2022, Mr Justice Zacaroli handed down judgment on an application for directions made by the officeholders of ten different energy supply companies (“ESC” or “ESCs”) seeking clarification on issues arising in the insolvencies of the ESCs which had not previously been the subject of judicial consideration. In terms of quantum, the issues … Continue Reading
Devinder Singh, a restructuring and insolvency partner in SPB’s Birmingham office, acted for one of ten applicants in an application for directions made in the High Court by a number of officeholders following the collapse of several energy supply companies (“ESC”). The application sought directions on a number of key issues affecting the energy industry … Continue Reading
Can a Company Voluntary Arrangement (“CVA”) complete, but still remain in place and bind creditors? The simple answer is yes; but it does require (a) the terms of the CVA to be carefully drafted to allow notice of completion to be filed before the end of the CVA term; (b) compliance with the terms of … Continue Reading
Supply chain disruption was exacerbated by the pandemic, and due to the ongoing conflict in Ukraine problems continue to impact UK businesses. Unfortunately there is no sign of disruptions abating in the short term. In a recent webinar Sarah Rathke explored the question: “Why is Everything Broken? Understanding Pandemic Supply Chains” which is available to view … Continue Reading
We look once again at the recent case of Re Active Wear Limited (in administration) (our other blog on another aspect of this case can be found here). As part of the changes introduced in light of Covid-19, the Temporary Insolvency Practice Direction (MIPD) was introduced, to enable statutory declarations on notices of intention to … Continue Reading
The UK High Court has ruled that the obligations of third-party guarantors are not affected by a part 26A restructuring plan being sanctioned in respect of the underlying obligations. This approach mirrors the way guarantees are dealt with in a part 26 scheme of arrangement. The case of Oceanfill Ltd. v Nuffield Health Wellbeing Ltd … Continue Reading
Following a long wait of 18 months, the Supreme Court has today confirmed that the appeal of the decision in BTI –v- Sequana is unanimously dismissed. The key question that many of us have been waiting for the answer to is: Does the creditor duty set out in s172(3) of the Companies Act 2006 exist … Continue Reading
The Supreme Court has refused permission for the case of Lock v Stanley to be appealed, meaning that the Court of Appeal’s approach to questions around the assignment by a liquidator of claims in the insolvent estate stands. Most notably the Court of Appeal confirmed that a liquidator is under no duty to offer defendants … Continue Reading
In the recent case of Re Active Wear Limited (in administration), the High Court ruled that the purported out-of-court administration appointment by a sole director of a company with unmodified model articles, was valid notwithstanding the earlier High Court decision in Re Fore Fitness Investments Holdings Ltd [2022] EWHC 191 (Ch). We have set out … Continue Reading
Brought in with the intention of protecting viable businesses from eviction or other enforcement measures in relation to rental arrears accrued as a result of COVID-19 lockdown restrictions, the arbitration scheme (the “Scheme”) provided for under the Commercial Rents (Coronavirus) Act 2022 (the “Act”) has now ended. Its expiry sees the lifting of all remaining … Continue Reading
Following the UK government announcing that UK businesses will benefit from a reduction in energy costs to help combat rising energy costs, details of the proposed scheme have now been released. Under the scheme, a discount will be automatically applied to the bills of those businesses that are eligible to receive it, namely businesses that … Continue Reading
Last week, the new Prime Minster announced a 6 month scheme to help businesses with rising energy costs. Although further details are awaited, the scheme is likely to reflect the support being provided to consumers, by offering a guarantee that discounts the unit costs for gas and electricity. Recognising that businesses have not benefitted from … Continue Reading
HMRC as the UK tax authority is often the largest creditor in any insolvency, but has not always been willing to engage in the process. This has caused viable restructuring proposals to fail for lack of support and this sometimes results in HMRC not achieving the best return. HMRC recognise that this stance has frustrated … Continue Reading
There has been very little to indicate how HM Revenue and Customs (“HMRC”) might approach a restructuring plan (RP), following HMRC’s preferential status being restored in 2020. The reinstatement of HMRC as a preferential creditor potentially makes company voluntary arrangements non-viable if HMRC do not support, but what about RPs? RPs introduced for the first … Continue Reading
In PGD (in liquidation) Manolete Partners plc v Hope Mr Justice Zacaroli considered whether it was possible and/or appropriate to limit the quantum of relief granted in insolvency litigation to the amount required to pay the liquidation debts, costs and expenses where the claim had been assigned to a third-party litigation funder. Zacaroli J held … Continue Reading
Although there have not been many moratoriums since they were introduced, there have been a few, and according to data collected for this recent interim report, the costs of appointing a monitor and entering into a moratorium appear to be fairly reasonable. This will provide comfort to both corporates and practitioners who (understandably) might be … Continue Reading
The perceived costs of proposing a restructuring plan are seen to be the biggest inhibitors to using the process for SMEs. It is still a relatively new tool and insolvency practitioners, lawyers and the courts are still grappling with it, but as we have seen recently in Amigo Loans it can provide creative and innovative … Continue Reading
The Court of Appeal recently handed down its judgment in the Hoey case. The case is noteworthy because it helps illustrate the extent of HMRC’s powers to collect tax by shifting compliance obligations from one person to another. As can be readily appreciated, this could be particularly of note for directors of companies that have … Continue Reading
It is often the case, that insolvency claims are pursued against former directors of the insolvent company or persons connected to them. It is also often the case, that such claims are assigned to a litigation funding company given lack of funds in the insolvent estate to pursue them. This is what happened in Lock … Continue Reading
