At the end of February 2008 new rules were introduced aimed at tightening the existing measures to combat illegal working, by making it more difficult for people to exceed any permission granted to stay in Great Britain or continue working in breach of the conditions imposed on them by the immigration authorities and to make it easier for employers to ascertain whether it is legal for them to engage any prospective employee.

Prevention of illegal working

Only a month ago we were singing the praises of the CVA and calling them the saviour of the high street following the creditors’ approval of the BHS CVA. (See our earlier blog Move over Mary Portas, CVA’s are the real saviour of the High Street).

Unless you have been living in a cave, you will have heard the very disappointing news that the current exemption to the Jackson reforms for insolvency claims under the Legal Aid, Sentencing and Punishment of Offenders Act (“LASPO”) will cease as of 1 April 2016.

If you are to avail yourself of the benefits of the Jackson exemption, which was one of the few pieces of legislation that levelled out the playing field between Insolvency Practitioners (“IPs”) and rogue directors – then read on.

In March 2014 the European Commission issued a Recommendation considering a new approach to business failure and insolvency, targeting efficient restructuring of viable enterprises in financial difficulty and a second chance for honest entrepreneurs.

In the United Kingdom, the Pension Protection Fund (“PPF”) is the safety net for the employee members of a defined benefit pension plan or scheme.  The PPF compensates members when an employer has not and cannot put sufficient assets in the pension scheme to meet its obligations to member employees and the employer has suffered a “qualifying insolvency event”.

The recent English High Court decision in Horton v Henry [2014] EWHC 4209 (Ch)has conflicted with the earlier decision in Raithatha v Williamson [2012] EWCA Civ. 799 and leaves the law unclear as to whether a debtor’s pension forms part of their bankruptcy estate.

A trustee in bankruptcy’s entitlement to seek an income payments order (“IPO”) in respect of a bankrupt’s income is governed by section 310 of the Insolvency Act 1986 (the “IA”). Under section 310(7) of the IA the income of a bankrupt:

The case held that a judge was right to strike out a claim brought by a liquidator under sections 238 and 241 of the Insolvency Act 1986, as the transactions alleged to have been made at an undervalue were not transactions entered into by the company.

Comment

The recent English court decision in Goldacre (Offices) Limited v Nortel Networks UK Limited (in administration) [2009] EWCH 3389 (Ch) may be controversial and raises thorny practical issues, especially in relation to the restructurings of retail businesses.   

This Act received Royal Assent in July 2007 but no date for implementation has been published yet.

In addition to the provisions contained in this Act aimed at improving the working of the tribunals system and increasing judicial diversity, are several sections that will be of interest to financiers and insolvency professionals: 

The latest iteration of the Sun Capital litigation has confirmed once again what many restructuring professionals have known for a long time - that pension liabilities have a nasty habit of kicking investors where it hurts, often when least expected. Our recent blog explains the decision and provides some insights on the case.