On 12 May 2021 the FCA issued finalised guidance for insolvency practitioners who are tasked with managing insolvencies of regulated firms.
Aiming to help insolvency practitioners understand how to deal with firms in line with FCA requirements, the guidance covers the process from end-to-end including expectations in the pre-insolvency stage and specific procedures relating to insolvencies and restructuring. The aim of the guidance is to assist with the minimising of the impact of a failure of a regulated firm
As a result of temporary provisions that have been in place since March 2020*, during the Covid period directors have been broadly protected from the risk of personal liability for wrongful trading. Those temporary provisions are due to end on 30 June, 2021 and as a result, the law on wrongful trading again becomes highly relevant.
The temporary restrictions on winding-up petitions brought in under the Corporate Insolvency and Governance Act 2020 (“CIGA”) are wider than originally envisaged when first announced by the government in April 2020 and have now been extended until 30 September 2021.
Includes developments in relation to: ESG; CRR; COVID-19; IFPR; Basel III; Securitisation Regulation; LIBOR; and EMIR.
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HEADLINES
The pandemic has created a chaotic business environment in which it is has at times been practically impossible to make any definitive plans. Lockdown measures have changed regularly, legislation has been introduced and extended and the rules for conducting business (when it is even possible to trade) have varied across the UK and have at times been criticised by those most harshly effected as being arbitrary and unscientific. All of this has often happened at very short notice.
Fallout from the global pandemic continues to throw light on the responsibilities of directors in times of financial distress. This briefing examines those duties in greater detail, particularly in relation to Guernsey’s company law.
Decisions, decisions
Directors owe duties to the companies they serve and ordinarily discharge those duties with reference to the interests of the companies’ members as a whole.
Following a government announcement on 16 June, the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2021 (the Regulations) have been laid before Parliament, coming into force on 22 June.
Sir Alastair Norris’ High Court judgment of 14 May 2021, confirming the sanctioning of the scheme of arrangement of DTEK Finance PLC in respect of existing bank lenders (the “Bank Scheme”) and the scheme of arrangement of DTEK Energy B.V. in respect of the outstanding notes (the “Note Scheme”) has now been published.
In a recent High Court judgment, Judge Briggs considered the process to be followed where, in insolvency proceedings, a liquidator or administrator assigns a cause of action to another party under s246ZD of the Insolvency Act 1986 (the Act), and the assignee mistakenly brings an application under the Insolvency Rules 2016 (the Rules) when the claim should properly have been brought under Civil Procedure Rules.
Background