Monthly Law Update | Social Housing July 2018 Introduction Supply chain This update shows the main legislative and case law developments and statutory guidance issued in connection with the Social Housing sector from the last month (June 2018) together with links to the relevant sources where you can obtain further information. If you have any concerns about any of the developments outlined in this update, or if you require any advice on the effect of the developments or on how to respond appropriately, please contact:
Dubbed "the year of the CVA", 2018 has so far seen a spate of high profile retail insolvencies. Landlords are seeking to protect their position in this volatile climate.
The rules governing the actions landlords can take in insolvency situations are complex. They depend on whether the tenant is a company or individual, the specific insolvency process involved and whether the Financial Collateral Arrangements (No. 2) Regulations 2003 (FCAR) apply.
Directors may not be able to rely on limitation as a defence to some misfeasance claims, following the Supreme Court's decision in Burnden Holdings (UK) Ltd v Fielding [2018] UKSC 14.
Where directors have obtained an economic benefit from an unlawful distribution they are not entitled to rely on the lapse of time as a defence to any claim brought by the company, held the Supreme Court.
Reforms are needed to the current company voluntary arrangement (CVA) process, according to both R3 and the British Property Federation (BPF).
R3 (the trade association for the UK’s insolvency, restructuring, advisory, and turnaround professionals) has published a research report recommending a number of reforms to improve the effectiveness and reputation of CVAs. These include:
In this recent judgment, the court considered the extent of an administrator's duties and when an administrator could be considered an agent to a secured lender.
The issues considered by the Court
The court explored the nature of the administrator's duties in relation to the conduct of the administration, the decision of which selling agents to appoint and the sale of the secured asset.
The High Court has released an important decision for landlords and Insolvency Practitioners in the wake of the failure of the company voluntary arrangement (CVA) entered into by BHS Limited (BHS).
In the recent case of Reynard v Fox, the High Court struck out a claim brought by a litigant in person and cited the recent Supreme Court decision in Barton v Wright Hassall.
The court rejected the claimant's submission that this would be unjust because as a litigant in person, he did not have a detailed knowledge of the insolvency regulations. It ruled that the relevant regulations were not hard to find, difficult to understand or ambiguous.
Background
The Court of Appeal has released an important decision for landlords and tenants concerning applications for consent to assign a lease, overturning the High Court's earlier decision in No.1 West India Quay (Residential) Ltd v East Tower Apartments Ltd.
The Court of Appeal decided that one bad reason for a landlord refusing its consent will not render the entire decision to withhold consent unreasonable, so long as there are other reasons for the refusal which are good and free-standing.
The Insolvency community in Scotland has watched with interest the case of Grampian MacLennan's Distribution Services Ltd v Carnbroe Estates Ltd and in particular Lord Woolman's eyebrow raising opinion at first instance that a distressed sale by a company of its major asset (an industrial unit comprising a warehouse, vehicle workshop and yard with gatehouse) had not constituted a gratuitous alienation where the sale has been off market at a price of £550,000 whereas the property had been valued at £1,200,000 on the open market or at £800,000 on a restricted 180 day marketing period
A recent Judgment by Sheriff Jamieson at Dumfries Sheriff Court has provided some guidance on the scope of the role of a Court Appointed Reporter in assessing the remuneration of liquidators.