Tag Archives: insolvency practitioner

UK FAQs: Furloughing and Administration – Key Considerations for Administrators

It is not entirely clear how the UK Coronavirus Job Retention Scheme operates in line with current UK insolvency legislation, although it is clear that administrators can use the scheme and furlough employees. We have produced an alert that answers some of the key questions for administrators looking at whether employees should be furloughed or … Continue Reading

Q&A: Regulatory requirements for UK Insolvency Practitioners during COVID-19

COVID-19 is placing unprecedented strain on all businesses, and insolvency practitioner (“IP”) practices are no exception. Government-imposed restrictions on activities and movement will have a direct impact on the ability to carry on business as usual. There may be fewer employees available (through illness, self-isolation and furloughing), strain placed on remote working capabilities and a … Continue Reading

Q&A: How should UK Insolvency Practitioners deal with active cases during COVID-19?

COVID-19 and Government-imposed restrictions are placing an unprecedented strain on everyone and businesses and individuals may be facing extreme financial pressure. COVID-19 is impacting businesses throughout the supply chain in most, if not all, sectors. This may mean that clients and debtors are unable to meet their obligations and there may need to be changes … Continue Reading

Cryptocurrencies: practical considerations in insolvencies

In a recent report by INSOL International, only 5% of insolvency practitioners (“IPs”) said that they had a “comprehensive or practical/working or understanding” of crypto-currency. So with over 4,000 types of cryptocurrency now available and as payment technology continues to develop, we look at some issues facing IPs, including How to identify cryptocurrency How to … Continue Reading

HMRC, preferential treatment and insolvency – uncertain times for funders

This morning Squire Patton Boggs in conjunction with R3 hosted representatives from across the business community to discuss the proposed return of Crown preference in insolvency. Following the Government announcing in last Autumn’s Budget that HMRC’s preferential status will be restored in part in April 2020, Squire Patton Boggs together with R3 and representatives from … Continue Reading

When is a decision to declare an interim dividend a decision?

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

Government proposes legislation to enhance UK insolvency regime

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

New Guidance Note Anticipated on Collective Redundancies in Insolvency

The Insolvency Service intends to publish a new guidance notice to address the issues faced by employers in dealing with collective consultation when a company is facing insolvency, following consultation with the industry last year. The guidance note is expected to require insolvency practitioners to notify the government in advance of collective redundancy proposals and … Continue Reading

Professional firms – in the fee firing line again

In the last week we have seen MPs criticise accountancy firms, KPMG, Deloitte, EY and PWC in their first report on the collapse of Carillion, describing the big four as “a cosy club” and calling for the firms to be forcibly broken up.  Whilst not suggesting that the firms were to blame for the collapse, … Continue Reading

Taking advice from professionals is not a “get out of jail free” card for directors in the event of insolvency

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

Tax abuse and insolvency – an HMRC consultation

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

Is the UK insolvency regime equipped for the current political and economic climate?

An effective and well-equipped insolvency and restructuring regime gives confidence to investors and financiers, enabling credit to flow through to businesses and boost economic activity, growth and innovation. In 1999, following the Asian financial crisis, the World Bank carried out a review of the international regimes to establish a set of key principles for effective … Continue Reading

Retail CVAs – update for landlords

Carpetright, the UK flooring company, has announced that it is considering a Company Voluntary Arrangement with the aim of “rationalising the company’s property portfolio in order to improve the long-term prospects of the business”.  This is expected to enable the business to close unprofitable shops and reduce their rent bill.  With 409 shops across the … Continue Reading

Zombie High Street: Retail Casualties

There was a magical place that’s now in administration. It’s called ‘Toys R Us’, Toys R Us’, Toys R Us’. This week has seen another two major retail casualties with the aforementioned much-loved toy shop and well-known electrical retailer Maplin going into administration within minutes of each other. As predicted in one of our recent … Continue Reading

German Court rejects the “bow wave theory” (“Bugwellentheorie”) in test for company illiquidity

Under German law, there are strict legal obligations for the managing directors of an insolvent company to file for insolvency. Failure to comply exposes a managing director to civil and criminal liability. It is therefore important for managing directors to know how to test whether their company is insolvent. One of the legal reasons for insolvency … Continue Reading

Parent guarantees in the insolvency of a German subsidiary – claw back risks

A recent ruling of the German Federal Civil Court (Bundesgerichtshof (“BGH”)) is a reminder of the risks which shareholders of a German company can face in an insolvency of their German subsidiary. Under the German Insolvency Code (“InsO”), claims for repayment of a loan granted by a shareholder who holds more than 10% of the … Continue Reading
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