The High Court decision in Re All Star Leisure (Group) Limited (2019), which confirmed the validity of an administration appointment by a qualified floating charge holder (QFCH) out of court hours by CE-Filing, will be welcomed.

The decision accepted that the rules did not currently provide for such an out of hours appointment to take place but it confirmed it was a defect capable of being cured and, perhaps more importantly, the court also stressed the need for an urgent review of the rules so that there is no doubt such an appointment could be made.

Retail Company Voluntary Arrangements (CVAs) are becoming an increasingly popular means of minimising liabilities and creating breathing space for tenants during a difficult trading environment on the High Street. Where does this leave landlords?

In certain circumstances, if a claim is proven, the defendant will be able to offset monies that are due to it from the claimant - this is known as set off.

Here, we cover the basics of set off, including the different types of set off and key points you need to know.

What is set off?

Where the right of set off arises, it can act as a defence to part or the whole of a claim.

Whilst receiving a judgment in your favour may feel like the culmination of a potentially lengthy legal process, it may be just the first step (though an important one) on the path to financial recovery. In our latest insight, we look at how and when you can enforce a judgment to realise payment of any damages or costs which have been awarded.

What is enforcement?

This ThinkHouse TUPE Club Q&A deals with our Top 10 questions on:

• the key employment issues in Administrations and Liquidations; and
• how TUPE applies when there is an insolvency situation.

Q1. What is the effect of insolvency on contracts of employment?

There are various types of insolvency proceedings and these are designed to achieve various different end results. The different types of insolvency also have different consequences for the entity and employees.

Administration

Notice of assignment

Notice of assignment can be given by either the assignee or assignor under the Consumer Credit Act 1974 (CCA).

This was the High Court's finding in Smith v 1st Credit (Finance) Ltd and another. Smith was notified by her credit card company that her credit card debt had been assigned to 1st Credit. 1st Credit wrote to Smith shortly afterwards confirming the assignment and advising how payment could be made. Smith failed to pay and was made bankrupt by 1st Credit which subsequently repossessed and sold Smith's property.

The court will unravel a transaction where it appears to have been entered into to place assets beyond the reach of creditors.

This was the case in Ambrose sub nom Garwood v Amborse & Ambrose, where the trustee in bankruptcy of Mr Ambrose applied for declaratory relief and an order for the possession and sale of Mr & Mrs Ambrose's property.

Key points

• The High Court has ruled that, where a tenant goes into administration, rent which is payable in advance and falls due before the commencement of the administration is not recoverable by the landlord as an administration expense
• Landlords must take their place with other unsecured creditors in relation to sums payable before the appointment of administrators, even if they relate to a period during which the administrators had use of the property

Background

Gym chain Fitness First is the latest high street name to propose a company voluntary arrangement (CVA) to its creditors. The chain currently runs more than 140 clubs in the UK but the arrangement proposes that 67 will be transferred to other operators within six months. Landlords will be reviewing the terms of the proposed CVA carefully.

A CVA is an agreement reached by a corporate debtor with its unsecured creditors. It is generally seen as a quicker and less formal route out of trading difficulties than administration.

In Rhinegold Publishing Ltd v Apex Business Development Ltd, Rhinegold and another company owed debts to the defendant in the sums of approximately £22,000 and £31,000 respectively. The defendant presented a winding-up petition against both companies which resulted in settlement being reached. The settlement provided that the companies would pay off the debts owed in full by monthly payments and that no proceedings would be issued in relation to the debts referred to in the original statutory demand if payment was made.