FSA has made a statement explaining how the bank’s failure to comply with FSA’s liquidity guidelines as they applied to it was critical. It says that while the bank’s downfall was not directly due to the breaches, the breaches happened at a critical period for the financial markets and at a time FSA needed banks to keep it up to date on their liquidity. (Source: FSA Explains Liquidity Importance)
FSA announced on 31 October that MF Global UK Limited had entered into special administration. It noted this is the first time the special administration regime has been initiated since it took effect in February 2011, and summarised the benefits of the regime. In particular, it highlighted that the regime should facilitate swift return of client assets and timely engagement with market infrastructure. (Source:FSA Announces MF Global Administration)
Treasury is consulting on implementation of the changes to the Settlement Finality Directive (SFD) and the Financial Collateral Directive (FCD) in the UK. The changes to the Directives cover:
The Investment Banking Insolvency Panel of the FMLC has responded to Treasury’s consultation on developing effective resolution arrangements for investment banks. The response is wide-ranging and looks at clarity, transparency and access before setting out views on client assets and insolvency processes.
This round-up collates the information, analysis and guidance relating to insolvency issues shared by our Construction and Restructuring, Insolvency and Bankruptcy teams during the COVID-19 pandemic. For further information on any of the issues below, please get in touch with one of the Key Contacts.
In this article, Dentons gives its inside view on the pre-pack evaluator's report, made compulsory earlier this year to improve the confidence of creditors in pre-pack administration sales to connected persons. We consider the practicalities of selecting the right evaluator for the job, the potential for "opinion shopping" from evaluators and whether these new regulations have achieved what was intended.
A recap on pre-packs
The UK government introduced the Corporate Insolvency and Governance Bill (CIGB) to Parliament on 20 May 2020. As well as including temporary measures to help support businesses affected by COVID-19, it proposes significant permanent changes to UK insolvency law. These proposed permanent changes include a new company moratorium: a mechanism to give a company in financial difficulty a temporary breathing space against creditor action, during which the directors remain in control, but overseen by a monitor.
(1) Citicorp Trustee Company Limited and (2) Golden Belt Sukuk Company BSC v. (1) Maan Al-Sanea and (2) Saad Trading, Contracting and Financial Services Co [2017] EWHC 2845 (Comm)
In this case, the High Court considered whether valid service had been effected upon two defendants based outside of the jurisdiction who had shown no willingness to be involved in the proceedings.
More important changes to the Insolvency Act 1986 (IA86) and other insolvency- related legislation come into force this week (1 October 2015) as a result of the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015).
We have updated our Implementation Timetable to reflect the changes.
The case concerning the Game group of companies' administration has now been played out in the Court of Appeal and the eagerly anticipated judgment has been handed down.
The issue at stake concerned a landlord's ability to recover rent as an expense of administration (and therefore payable before other creditors) where such rent is payable in advance but where the tenant's administration occurs immediately before a quarter day's rent falling due.