The Board of the Privy Council has allowed an appeal in relation to the application of the so-called “reflective loss” principle, confirming that the rule falls to be assessed as at the point in time when a claimant suffers loss and not at the time proceedings are brought Primeo Fund v Bank of Bermuda (Cayman) Ltd & Anor (Cayman Islands) [2021] UKPC 22.

The High Court has, for the first time since the introduction of the legislation in June 2020, refused to sanction a cross-class cram-down restructuring plan under Part 26A of the Companies Act. In In the matter of Hurricane Energy Plc [2021] EWHC 1759 (Ch), the court rejected a plan supported by bondholders because it had not been shown that the opposing shareholders had no better alternative prospects (i.e., the ‘no worse off condition’ had not been met).

The English High Court has sanctioned the scheme of arrangement proposed by Provident Financial, by which the net liabilities of two Provident group companies to their redress creditors will be subject to a 90-95% haircut. This case raises two interesting questions.

Why was the scheme sanctioned when the recent Amigo Loans scheme was not?

In the recent Sheriff Court judgment in the case of The Accountant in Bankruptcy v Peter A Davies, the Sheriff sought to clarify how a family home should be dealt with following the sequestration of an individual.

Background

The debtor was sequestrated in October 2010.

In October 2020, the Accountant in Bankruptcy (‘AiB’) applied to the Sheriff under section 40 of the Bankruptcy (Scotland) Act 1985 (now section 112 of the Bankruptcy (Scotland) Act 2016) to permit the sale of the debtor’s family home.

The terms "ranking agreement" and "intercreditor agreement" are used interchangeably but generally refer to the same types of agreement - being those which regulate the priority of repayment of indebtedness owed to the creditors of an obligor. Strictly speaking, a ranking agreement is the Scottish equivalent to the English law deed of priorities and is typically used for shorter form ranking arrangements. As is the case in England, a Scottish intercreditor agreement is typically reserved for more complex arrangements and usually ranks both securities and liabilities in point of priority.

In our first and second summaries on the key differences in taking security between Scotland and England, I summarised the positions on the Scots law of assignation and share security respectively.  This is the third summary in that five part series and considers the position on floating charges in Scotland.

Challenges in bricks-and-mortar retail are not new. However, the impact of the COVID-19 pandemic has accelerated many key consumer trends away from the high street, forcing acute (and potentially permanent) reductions in footfall as well as widespread store closures. To date in 2021, the number of stores in the UK is reported to have fallen by almost 10,000.

National Car Parks' proposed restructuring plan aimed to write-off arrears, cut rents and close unwanted sites but why did the plan stall?

On 30 April 2021, National Car Parks launched its proposed restructuring plan, which is the flagship new restructuring process introduced last June through the Corporate Insolvency and Governance Act 2020. Around a dozen restructuring plans have come to market so far, but the NCP plan was only the second (the first being Virgin Active) to involve landlord creditors.

Last Friday, the Court of Appeal handed down judgment in Al Jaber v Mitchell [2021] EWCA Civ 1190, a keenly awaited decision which considers with the application of the doctrine of immunity from suit to statements given by a former director during an examination under section 236 Insolvency Act 1986.

Insurance Regulatory Briefing

HM Treasury Consults on Amendments to Insurer Insolvency Regime

2 AUGUST 2021

London

Table of contents

Recent proposals to amend insolvency rules applying to insurers aim to enhance and clarify existing powers for a court-ordered write-down of an insurer's policy and other contractual liabilities under Section 377 of the Financial Services and Markets Act 2000 ("FSMA"). Other proposed measures include:

1. The Case for Change 2. The Proposed Changes 3. Contacts

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