Different countries frame the exact description of the role of directors of a company in different terms. One feature is common to all – the obligation not to continue trading if a company is insolvent. Again, the detailed implications of doing so vary from one jurisdiction to another. We have updated our consolidated guide to … Continue Reading
Following the UK government publishing the Corporate Insolvency and Governance Bill which sets out temporary changes to the UK Insolvency laws on wrongful trading (see here for further discussion) we have updated our guide on directors’ duties.… Continue Reading
The UK government has released its recovery strategy dealing with how the UK might move from lockdown to the “ new normal” enabling some businesses to re-open. The ability to begin rejuvenating businesses that have been mothballed for the past couple of months is good news but corporates should proceed with caution as they take … Continue Reading
On 20 May 2020, the UK Government introduced the Corporate Insolvency and Governance Bill (the “Bill”) to the House of Commons. The aim of the Bill was temporarily to amend corporate insolvency laws to give companies the best possible chance of weathering the storm of the COVID-19 pandemic. One of the significant measures can be … Continue Reading
Organisations need to understand how they can prepare ahead of the UK government preparing to bring the country out of lockdown, while not necessarily knowing the timescales or details of how restrictions will be lifted, or in what order. We have prepared a quick guide to help UK businesses start to think about some of … Continue Reading
Different countries frame the exact description of the role of directors of a company in different terms. One feature is common to all – the obligation not to continue trading if a company is insolvent. Again, the detailed implications of doing so vary from one jurisdiction to another. We have produced a consolidated guide setting … Continue Reading
This quick guide summarises the duties that directors of Slovakian companies are subject to and how those duties change when the company is insolvent or at risk of being insolvent. It also gives an overview of the personal risk to directors when the company is in financial difficulty and suggests some practical tips to help … Continue Reading
This quick guide summarises the duties that directors of companies incorporated in the Czech Republic are subject to, and how those duties change when the company is insolvent or at risk of being insolvent. It also gives an overview of the personal risk to directors when the company is in financial difficulty and suggests some … Continue Reading
This quick guide summarises the duties that directors of companies incorporated in England & Wales are subject to, and how those duties change when the company is insolvent or at risk of being insolvent. It also gives an overview of the personal risk to directors when the company is in financial difficulty and suggests some … Continue Reading
This quick guide summarises the duties that directors of Italian companies are subject to and how those duties change when the company is insolvent or at risk of being insolvent. It also gives an overview of the personal risk to directors when the company is in financial difficulty and suggests some practical tips to help mitigate … Continue Reading
This quick guide summarises the duties that directors of French companies are subject to, and how those duties change when the company is insolvent or at risk of being insolvent. It also gives an overview of the personal risk to directors when the company is in financial difficulty and suggests some practical tips to help … Continue Reading
COVID-19 poses many acute dilemmas for boardrooms. Directors and executives need to make highly sensitive decisions to navigate through the COVID-19 crisis. Decisions taken now could come under scrutiny and potentially give rise to future litigation and regulatory intervention, so directors should be mindful of their duties and consider how their decisions may look in … Continue Reading
It is often common practice for small businesses to structure payments to a director (who is also a shareholder) through a combination of dividend payments and salary, in order to minimize PAYE liabilities and reduce tax. Consequently, rather than be paid a salary, a director is “remunerated” by dividend payments. This works when the company … Continue Reading
On 26 August, the Government announced that it will be making changes to UK insolvency legislation. The changes are intended to support distressed companies and address issues highlighted by major company failures and include: the ability for all companies to apply for a moratorium a new insolvency process – the “restructuring plan”, enabling companies to cram … Continue Reading
Directors of a company in financial distress will often turn to their professional advisors to assist in making decisions about the company’s future; whether that be their lawyers, accountants, bank, tax advisors or insolvency professionals. It is often a period of high pressure, where the right or wrong decision may have far-reaching consequences for an … Continue Reading
HM Revenue & Customs (“HMRC”) has issued a consultation entitled “Tax Abuse and Insolvency: A Discussion Document” on how it proposes to confront those who misuse insolvency law as a means of avoiding or evading their tax liabilities. HMRC often describes itself as an “involuntary creditor” because it does not choose to trade with debtors. … Continue Reading
VE Vegas Investors IV LLC and others vs Shinners and others [2018] EWHC 186 Ch Background The applicants were creditors of VE Interactive Limited (In administration) (“VE”). VE encountered financial difficulties and its directors sought insolvency advice from insolvency practitioners at Smith and Williamson (“S&W”) and appointed them to advise on and effect a pre-pack … Continue Reading
Media attention has waned from the initial deluge of front-page headlines regarding the Carillion collapse. It would therefore be easy to be ignorant of the ongoing disintegration of the web of Carillion companies beneath Carillion Plc, the ultimate parent company of the Carillion group, which (according to its latest accounts) holds interests in over 350 subsidiaries … Continue Reading
As of 1 January 2018, those who are obliged to file a petition for declaration of bankruptcy of a company will face stricter liability in Slovakia. This could result in them being required to pay a fine/damages and can even result in their disqualification from sitting on boards of Slovak companies. In addition to an obligation to pay a … Continue Reading
There are various ways misconduct can be reported in respect of companies and individuals. Establishing which authority has the power to conduct investigations of wrongdoing depends to a certain extent on the status of the companies and individuals. The Insolvency Service is empowered by law as the proper authority to investigate transgressions such as serious corporate abuse and the conduct of … Continue Reading
German insolvency laws are very strict. The management of an insolvent company is under strict obligations to file for insolvency, and failure to comply with such obligation may result in civil and criminal liability. Other stakeholders, like financing banks or suppliers, who are dealing with a distressed company, require documentation that their contract partner can … Continue Reading
The insolvency of companies in Russia is often caused by the negligent or illegal actions of their shareholders and/or management. The Russian Federal Law on Insolvency has been amended to introduce stricter rules on “controlling persons,” which increases their liability for the damage caused to creditors by their actions.… Continue Reading
Dickinson v NAL (Realisations) Staffordshire Ltd is a useful case on how directors’ duties are looked at following a formal insolvency and ways in which an office holder can challenge transactions if there is evidence of wrongdoing or a concerted strategy to frustrate creditors’ recourse to a Company’s asset base which would ordinarily be available … Continue Reading
An employment tribunal has recently confirmed that employees who have been unfairly dismissed from an insolvent employer can bring an action against a connected successor company. The tribunal held that there was a ‘commonality of ownership’ between the original and successor companies and that it was correct as a matter of public policy that employees should be able … Continue Reading
